Saudi Arabian Oil Co., most popularly known as Saudi Aramco, is yet to finalize a date for its long planned initial public offer, but reports said, citing Saudi Arabian officials, that the IPO most likely would be conducted in the second half of 2018.
Saudi Aramco Chief Executive Officer Amin Nasser told Bloomberg that the country has promised to reduce the overall tax rate paid by the state-owned energy giant to make its 2018 IPO more appealing to investors. At present, Aramco pays a 20 percent royalty on its revenue along with an 85 percent tax on income.
In the IPO, which is said to be the world's biggest ever IPO, the government plans to sell up to 5 percent of the company. Since early last year, Saudi Aramco officials have been working various details of the offer.
Meanwhile, reports said that a cut in Aramco's tax rate may not be necessary as the company is making profit with the current tax regime even when oil prices decline. In 2016, Aramco paid a dividend and funded its biggest-ever capital investment program, after paying the hefty tax and despite a 12-year low oil price.
In his interview with Bloomberg, Nasser said the country was considering whether to do a double listing, or a triple-listing. For the international sale of shares, Saudi Arabia reportedly is looking at markets including Hong Kong, London, New York and Canada as international venues for the sale.
The IPO is part of Deputy Crown Prince Mohammed bin Salman's plan to set up a sovereign wealth fund and to reduce the economy's reliance on hydrocarbons.
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