Advisers working on Saudi Aramco’s mammoth share sale may split a fee pool of as much as $450 million, making it one of the biggest initial public offering (IPO) payouts globally, reported Bloomberg.
The oil giant is set to pay between $350 million and $450 million to a group of more than 20 banks working on its IPO. The payment would represent a fee of about one per cent on the $40 billion Saudi Aramco is seeking to raise—relatively low in comparison to other markets.
Investment bankers from around the world have been pitching for years to win a coveted role in Saudi Aramco’s IPO. Many firms have been investing heavily in the Kingdom on expectations of a fee bonanza as the country diversifies away from oil. Many have been left disappointed though as deals have been delayed or failed to materialise.
Even though the state-owned energy giant’s IPO would be one of the biggest fee pools for investment banks, it would still fall short of the $535 million Softbank Group paid when it raised $21 billion by selling shares in its Japanese telecommunications business last year.
Saudi Aramco’s board is expected to meet with its advisers on the IPO this week to give final approval for the share sale. The oil fir is speeding up preparations for the IPO with an aim of listing on Tadawul as soon as November 2019.
The draw of working on what’s set to be the world’s biggest IPO—even for relatively low compensation—has attracted some of the top Wall Street names.
Saudi Aramco appointed nine global co-coordinators, including Goldman Sachs Group, HSBC Holdings and Credit Suisse Group. Additionally, there are also 15 bookrunners and three financial advisers.