Saudi Aramco Base Oil Co., a subsidiary of state-owned oil producer Saudi Aramco, has received regulatory approval for an initial public offering (IPO) in Riyadh. This comes as Saudi Aramco looks to list some of its subsidiaries in an effort to generate additional revenue. Saudi Aramco is the world's largest crude oil producer, and the listing of its subsidiaries is expected to generate significant interest from investors.
Saudi Aramco is planning to sell 50 million shares of its base oils subsidiary, representing a 29.7% stake in the company. This was announced by the Capital Market Authority on Thursday.
The refinery business, which is 70% owned by Saudi Aramco, is planning to launch an initial public offering (IPO) that could raise around $1 billion. Jadwa Investment, a local private equity firm, owns the remaining 30% of the business. Bloomberg reported in June that Citigroup Inc., HSBC Holdings Plc and SNB Capital have been hired to advise on the offering.
Aramco is considering selling a stake in its oil trading business, according to people familiar with the matter. The company has also sold stakes in units that lease its oil and gas pipelines to private equity investors.
According to data compiled by Bloomberg, Saudi Arabia has been one of the world's hottest markets for initial public offerings (IPOs) this year, with 27 deals already completed. This is in contrast to other markets where share sales have dried up.
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