Aramco eyeing plan to split IPO into two stages: Report

Saudi Aramco is considering a plan to split the world’s largest IPO into two stages, debuting a portion of its shares on the Saudi stock exchange (Tadawul) later this year, and following up with an international offering in 2020 or 2021, reported the Wall Street Journal on Thursday, citing people familiar with the plans.

The company is leaning toward Tokyo as the venue for the second phase of its proposed plan, the report revealed quoting advisers and officials, as political uncertainty in the UK and China reduces the appeal of London and Hong Kong’s markets.

Aramco, revived plans to sell 5% of its stock in an initial public offering this month aimed at funding Saudi Arabia’s efforts to diversify its economy beyond oil.

The company had initially targeted raising $100bn, but it remains unclear what the final number will be.

According to one plan under consideration, the company could seek to raise as much as $50bn in a domestic listing, one person said. Both domestic and international investors would have access to the stock in a domestic listing.

But if Aramco and its advisers choose Tokyo as the setting for the international offering, it would be a disappointment for London and Hong Kong, which were initially seen as the most likely locations for the listing.

Both locales were considered politically safer than the US, but are now less likely, the reports said, citing people in the know.