Aramco, the world's most profitable company, finally made an announcement about their long-awaited IPO. However, they did not provide many details about the number of shares to be sold, pricing, or the launch date. Bankers have estimated that investors will value the company at around $1.5 trillion, which is lower than the $2 trillion valuation initially suggested by Crown Prince Mohammed bin Salman four years ago. Aramco also did not mention any security measures taken after the attacks on its oil plants in September. Sources have suggested that the oil company could sell 1%-2% of its shares on the local bourse, potentially raising $20 billion-$40 billion. If the deal surpasses $25 billion, it would exceed the record set by Chinese e-commerce giant Alibaba in 2014. Aramco Chairman Yasir al-Rumayyan stated at a news conference in Dhahran that today presents a good opportunity for new investors to benefit from Aramco's value and long-term growth potential. The company will be engaging with investors over the next 10 days to gauge interest before determining a price range for the IPO. The goal of the IPO is to support Prince Mohammed's economic reform agenda by raising funds to develop non-energy sectors and diversify revenue sources. Rumayyan mentioned that a decision on an international listing for Aramco shares will be made in the future, but did not provide a specific timeline or location. Gary Ross, CEO of Black Gold Investors, believes that selling a small portion of Aramco in a controlled market gives Saudi Arabia more control over the company's value. Confirmation of the sale of shares in the oil giant, Saudi Arabian Oil Co, follows the attacks on its oil facilities about seven weeks ago, showing Saudi Arabia's commitment to continue with the listing. Amin H Nasser, president and CEO of Saudi Aramco, made these statements during a news conference at the Plaza Conference Center in Dhahran, Saudi Arabia on November 3, 2019. Aramco stated that the attack on September 14, which initially cut its production in half, is not expected to significantly impact its business, operations, or financial status. According to Aramco, the company accounted for approximately one in every eight barrels of crude oil produced globally from 2016 to 2018. In the third quarter of 2019, its net income was $21.1 billion, significantly higher than that of other oil companies like Exxon Mobil Corp, which was around $3 billion. Rumayyan mentioned that the valuation would be determined after the investor roadshow. Aramco's CEO, Amin Nasser, announced that the prospectus would be released on Nov. 9. Saudi Arabia is using easy credit for retail investors and significant contributions from wealthy locals to help finalize the deal. Rory Fyfe, managing director at Mena Advisors, stated that even with strong pressure on domestic investors to participate, international investors are likely to value the company lower than expected by Crown Prince Mohammed bin Salman. The Saudi stock market experienced a 2% decline on Sunday following the Aramco announcement, causing the benchmark index to drop nearly 20% since May. According to fund managers and analysts, local institutions have been selling shares in preparation for the Aramco deal. Salah Shamma, head of investment for MENA at Franklin Templeton Emerging Markets Equity, suggested that some investors may be selling other shares to invest in Aramco, viewing this as a short-term sacrifice for long-term benefits. To reassure investors, Aramco announced on Sunday that the state will waive its right to a portion of cash dividends on shares, prioritizing new shareholders. Additionally, Aramco is reducing the royalties it pays to the state. As of January 1, 2020, the company will implement a progressive royalty system, with rates of 15% up to $70 per barrel, 45% between $70 and $100, and 80% for prices above that. The Saudi market regulator approved the application to list on Sunday, and issued an exemption for non-resident institutional foreign investors to subscribe. Saudi investors may receive bonus shares, with a maximum of 100 bonus shares for every 10 allotted shares. At a valuation of $1.5 trillion, Aramco would still be worth at least 50% more than Microsoft and Apple, which each have a market capitalisation of about $1 trillion. However, a 1% sale would generate around $15 billion for Saudi Arabia, making Aramco the 11th largest IPO of all time according to Refinitiv data. "The Aramco IPO is an important part of Saudi Arabia's diversification story, with the proceeds likely to be less than the government's dividends from Aramco in the first half of 2019," stated Hasnain Malik, head of equity strategy at Tellimer. Wall Street has been eagerly awaiting the listing since it was first mentioned by Prince Mohammed in 2016. Aramco has enlisted the help of 27 banks, including Citigroup, Goldman Sachs, HSBC, JPMorgan, and Morgan Stanley, to work on the deal. Despite initial hopes for a large international listing, the share sale was postponed last year due to debates over where to list Aramco overseas. Rumayyan believes now is the right time for Aramco to go public." Aramco announced that the IPO timeline was postponed due to its acquisition process of a 70% stake in petrochemicals maker Saudi Basic Industries Corp. The preparations for the IPO were restarted this summer following a successful international bond sale by Aramco, which was seen as a way to build relationships with potential investors before the IPO. The expected announcement of the listing on October 20 was delayed as advisers needed more time to secure cornerstone investors. There is a growing trend among fund managers, especially in Europe and the United States, to divest from the oil and gas sector and focus on climate change and green technologies. Aramco's bond sale in April revealed its finances for the first time, showing a net income of $111 billion, which is more than a third larger than the combined net income of the five major oil companies. These companies are increasing payouts to shareholders to address the mounting pressure from climate activists. Aramco announced its plan to pay out a total of at least $75 billion in ordinary cash dividends for the year 2020. With a valuation of $1.5 trillion, this would result in a dividend yield of 5%, which is lower than the dividend yield offered by competitor Royal Dutch Shell. Refinitiv data shows that Shell's dividend yield is over 6%.