Saudi Crown Prince Mohammed bin Salman told Bloomberg News reporters that the planned Saudi Aramco IPO, selling a 5% stake in the company for a record $100bn, will go forward.
"I believe late 2020, early 2021," he told Bloomberg News. "The investor will decide the price on the day. I believe it will be above $2 trillion. Because it will be huge."
Rumors that it had been shelved spread quickly, earlier this year, amidst concerns about the company's $2tn valuation and its plan to acquire a controlling stake in downstream company SABIC.
"Everyone heard about the rumors of Saudi Arabia canceling the IPO of Aramco, delaying that, and that this is delaying Vision 2030," he said. "This is not right."
He noted that the IPO delay started in 2017, when it was decided that Aramco needed to break into petrochemicals. He elaborated, saying that it would not be fair to potential Aramco investors to jump into a major deal immediately following Aramco's listing.
Bloomberg reports that Prince Mohammed gave Aramco three years to complete the SABIC deal and the share sale.
"If we want to have a really strong future for Aramco after 20, 30, 40 years from today, Aramco has to invest a lot in downstream because we know that the new demand for oil 20 years from now, it will be from petrochemicals," he said.
Because Aramco provides the bulk of fuel that SABIC processes, Prince Mohammed told Bloomberg it made more sense to acquire a stake in the company than to form a new one. The government will keep Aramco shares after its IPO, moving away from a previous plan to transfer them into the sovereign wealth fund.
Bloomberg reports that "the PIF will receive the $70 billion from the sale of its stake in SABIC, plus the $100 billion that country hopes to raise from the Aramco IPO."