Reuters DUBAI (Reuters) — Saudi Arabia has changed the status of its national oil giant Aramco to a joint-stock company as of Jan. 1, in a key step for an initial public offering (IPO) planned for later this year.
The sale of up to 5 percent of Saudi Aramco, expected to go ahead in the second half of 2018, is a centerpiece of Vision 2030, an ambitious reform plan to reduce the dependence of the Saudi economy on oil. The plan is championed by Saudi crown Prince Mohammad bin Salman.
The change, which was published in a cabinet decree in the kingdom’s official bulletin on Friday, is a requirement for local companies in Saudi Arabia ahead of listing, a senior Aramco source, who declined to be named, told Reuters.
“As a customary step in the preparation process for a Saudi IPO, Saudi Aramco has converted to a joint stock company,” the source said.
“This establishes the framework to allow future investors to hold shares in the company alongside its shareholder, the government.”
But it is an important step as it shows the IPO process, which could be the biggest in history raising up to $100 billion, is moving ahead despite market speculation it could be delayed or totally shelved.
Prince Mohammad told Reuters in October it was still on track for 2018.
Aramco has a fully paid capital of 60 billion riyals ($16.00 billion) divided into 200 billion ordinary shares, according to the company’s bylaws published in the official bulletin.
The firm’s board will have 11 members and the power to list the company in domestic and international markets, it said. The government will propose six members of Aramco’s board, but shareholders with a more than 0.1 percent stake will have the right to propose a member to the general assembly.Speech