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Aramco to select Lazard, Moelis for world's biggest IPO: sources

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Aramco, which is planning a stock market listing as early as in 2020, is still planning to add more banks to the deal.

London

SAUDI Aramco has picked Lazard and Moelis & Co to advise on the oil giant's second attempt at the world's largest initial public offering (IPO).

The boutique investment banks have started preparatory work on the offering, according to people with knowledge of the matter. They requested anonymity because the information is still private.

Both Lazard and Moelis are expected to play a key role in the listing, including in the selection of underwriters and listing venues as well as working to ensure Aramco can secure its valuation expectations.

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The selection is a boon particularly for Lazard, which wasn't one of the advisers on Aramco's first listing attempt.

The oil producer was originally working with Evercore and Moelis, as well as HSBC Holdings, JPMorgan Chase & Co and Morgan Stanley.

Lazard's success working on the blockbuster Aramco bond sale this year put it in pole position to secure a role on the IPO.

Lazard was pushing hard in recent weeks to win a spot on the planned share sale, sending some of its top global dealmakers from London, Paris and Houston to woo Aramco officials at meetings in the Middle East.

The firm, run by Ken Jacobs, is likely to replace one of the original advisers that previously worked on the listing plans.

Aramco, which is planning a stock market listing as early as in 2020, is still planning to add more banks to the deal. No final decisions have been made, and Aramco's plans could still change or be delayed.

Saudi Arabia looks set to reward banks that have shown loyalty with positions on the listing, which could raise about US$100 billion.

Lazard's success on its debt issuance, which allowed Aramco to borrow US$12 billion at a lower yield than its sovereign parent, came at a time when Saudi Arabia was still facing international criticism over the controversial killing of Washington Post journalist Jamal Khashoggi in 2018.

Ken Moelis, who has earned himself the moniker "Ken of Arabia", was one of the few Western bank executives to show up at Saudi Arabia's signature investment summit in October 2018 in the aftermath of the Khashoggi scandal.

The IPO project was first announced in 2016 as the cornerstone of the kingdom's Vision 2030 plan to modernise the Saudi economy, with a target of listing in the second half of 2018.

Aramco formally put the IPO plans on hold last year and instead decided to buy a US$69 billion stake in local chemical giant Saudi Basic Industries Corp. BLOOMBERG