Aramco Unit Hires HSBC, Citigroup for $1 Billion Share Sale

(Bloomberg) — Saudi Aramco Base Oil Co., a refining unit of the state-owned oil producer, has named Citigroup and HSBC Holdings Plc for its preliminary public providing on the Saudi inventory change, which may elevate about $1 billion.

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The corporate, also referred to as Luberef, is planning to promote 50 million shares, or an almost 30% stake, in line with a press release. The value at which all subscribers within the providing will buy the shares might be decided after the book-building interval.

The corporate employed SNB Capital as lead supervisor, monetary adviser, book-runner, international coordinator and underwriter. It additionally named Citigroup Saudi Arabia, HSBC Saudi Arabia, and Morgan Stanley Saudi Arabia as monetary advisers, book-runners, international coordinators and underwriters

Saudi Arabia’s Capital Market Authority authorised Luberef’s IPO plan final week.

The refinery enterprise, with operations in Saudi industrial cities Jeddah and Yanbu, is 70% owned by Saudi Aramco, whereas the remainder is held by native personal fairness agency Jadwa Funding. The providing consists of Jadwa’s sale of its shares in Luberef, whereas Saudi Aramco is maintaining it’s stake. The providing may elevate about $1 billion, Bloomberg reported in June.

The energy-rich Persian Gulf has been one of many world’s IPO hotspots this 12 months, accounting for nearly half the proceeds from new share listings throughout Europe, the Center East and Africa. Whereas share gross sales elsewhere have dried up amid aggressive rate of interest rises, Center Japanese markers have benefited from excessive oil costs, and Saudi Arabia alone has seen a file 27 IPOs this 12 months, in line with knowledge compiled by Bloomberg.

Jadwa had acquired its Luberef holding in 2007 from Exxon Mobil Corp. Exxon had initially invested within the refinery in 1978.

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Luberef operates two manufacturing amenities in Yanbu and Jeddah on Saudi Arabia’s west coast. It produces numerous base oils and byproducts together with asphalt, marine heavy gas oil and naphtha. They’re primarily offered throughout the Center East, North Africa and India. It additionally sells throughout Asia, the Americas and Europe.

Demand Outlook

Demand for base oils globally is predicted to develop by about 5 million metric tons between 2022 and 2030, in line with an organization assertion. “The demand outlook for base oils is additional supported by robust macro fundamentals in Saudi Arabia and the broader Center East area, that are key end-markets for Luberef.”

“Luberef will proceed specializing in attaining progress in key end-markets, particularly the place market dynamics current enticing demand outlooks,” Tareq Alnuaim, president and chief government officer of Luberef, mentioned the assertion.

–With help from Dana Khraiche.

(Updates with firm assertion from eighth paragraph.)

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