Below is an article discussing the potential IPO of Saudi Aramco. Please review the article. In addition, research the topic and find additional articles. Once you have reviewed, answer the following...

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Below is an article discussing the potential IPO of Saudi Aramco. Please review the article. In addition, research the topic and find additional articles. Once you have reviewed, answer the following question:What is Aramco worth?In your discussion post, discuss what you think the company is worth, what articles and resources you used, and show the calculations you used.


Saudi Aramco, the giant oil company owned by the Saudi Arabian state, has confirmed that it is considering a share sale.


The move would make Aramco - already the largest oil producer - the world's most valuable listed company.


In an interview in the Economist, deputy crown prince Mohammed bin Salman had said a move was being "reviewed".


The company released a statement on Friday confirming it was looking at a number of options regarding a sale.


"Saudi Aramco confirms that it has been studying various options to allow broad public participation in its equity through the listing in the capital markets of an appropriate percentage of the company's shares and/or the listing of a bundle its downstream subsidiaries."


Aramco has crude reserves of about 265bn barrels - more than 15% of global deposits - and with falling oil prices a sale would raise revenues for Saudi.


The government has a deficit nearing $100bn (£68.4bn) due to the collapse in oil prices over the past 18 months.


The deputy crown princetold the Economisthe favoured listing Aramco shares on the stock market.


"Personally I'm enthusiastic about this step. I believe it is in the interest of the Saudi market, and it is in the interest of Aramco, and it is for the interest of more transparency, and to counter corruption, if any, that may be circling around Aramco."


He did not say how much of the company could be sold. Analysts have estimated that a full listing of Aramco would be worth more than $1 trillion.


The world's most valuable company currently is Apple, worth about $543bn.



More sales


Aramco produces more than 10 million barrels of oil per day, three times as much as the world's largest listed oil company, ExxonMobil.


Mohammed bin Salman, who as chairman of his country's new Council of Economic and Development Affairs has broad authority over the economy, said the government would sell a range of state assets in healthcare, education and some military industries.


"It will decrease some of the pressure that the government has, and some of them may create good profit," he told the Economist.


Fadel Gheit, analyst for Oppenheimer & Co, said an Aramco flotation "makes a lot of sense".


Even if, say, 20% of Aramco was sold it would fund Saudi Arabia's budget for a year.

Answered Same DayApr 24, 2021

Answer To: Below is an article discussing the potential IPO of Saudi Aramco. Please review the article. In...

Preeti answered on Apr 25 2021
146 Votes
Running Head: SAUDI ARAMCO
Financial Analysis & Disc
ussion
Saudi Aramco is the world’s biggest Oil Company owned by Saudi Arabian government which supplies nearly 10% of the world total oil supply (Momani, 2019) along with high profitability on account of its low cost production. In December 2019, the company had brought the world’s biggest IPO wherein the Saudi Government had diluted its stake by 1.73% which is in aggregate 3.45 billion ordinary shares of the company (Annual Report, 2019). The shares were issued at a price of $ 8.53 thus raising the funds of $ 25.6 billion and also beaten the IPO of Chines E-commerce Giant Alibaba worth of $25 billion which was launched in 2014 (Kelly and Reed,...
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