Advertisement
UK markets closed
  • NIKKEI 225

    40,168.07
    -594.66 (-1.46%)
     
  • HANG SENG

    16,541.42
    +148.58 (+0.91%)
     
  • CRUDE OIL

    83.11
    -0.06 (-0.07%)
     
  • GOLD FUTURES

    2,254.80
    +16.40 (+0.73%)
     
  • DOW

    39,807.37
    +47.29 (+0.12%)
     
  • Bitcoin GBP

    56,029.81
    +933.22 (+1.69%)
     
  • CMC Crypto 200

    885.54
    0.00 (0.00%)
     
  • NASDAQ Composite

    16,379.46
    -20.06 (-0.12%)
     
  • UK FTSE All Share

    4,338.05
    +12.12 (+0.28%)
     

A boutique bank beat Wall Street giants to be the sole adviser for the soon-to-be most valuable public company on earth

Saudi traders
Saudi traders

REUTERS/Fahad Shadeed

Moelis and Co., a boutique Wall Street investment bank, has reportedly been chosen as the sole independent adviser on the initial public offering of Saudi Arabia's state oil company, Saudi Aramco.

According to the Financial Times, which cited three people "familiar with the process," Moelis had been chosen by officials in the kingdom to help accelerate the pace of taking Aramco public. Aramco is believed to have a valuation of roughly $2 trillion (£1.6 trillion), easily making it the biggest public company in the world.

The Saudi government expects to float roughly 5%, or $100 billion, of Aramco in the IPO, though no numbers have been officially announced.

ADVERTISEMENT

Reuters reports that Moelis, which was founded just 10 years ago, beat out proposals from HSBC and Morgan Stanley to secure the advisory role.

Moelis' previous IPO action includes helping the luggage maker Samsonite with its $1.3 billion IPO in 2011, and the float of the plastic-pipe company Polypipe Group in 2014. That IPO was worth about £320 million ($400 million).

Saudi Aramco's IPO was first revealed in January of last year, and it forms the cornerstone of a huge new programme designed to help the kingdom diversify its economy. That initiative, known as Vision 2030, is being spearheaded by Prince Mohammed bin Salman to help wean the country off what Salman has called its "oil addiction."

Essentially, the IPO is designed to create a new revenue stream for the country, which, among other things, is also looking to increase the role of the services sector and to increase revenue from religious tourism to Islamic holy sites like Mecca. Should the country fail to diversify its economy away from oil, HSBC noted in May, the country faces "stagnation and decay."

Saudi Arabia is running a huge budget deficit, and in 2016 it was downgraded by the credit-ratings agency Moody's.

Neither Moelis nor Saudi Aramco has publicly commented on the FT's report.

You can read the whole Financial Times report here.

NOW WATCH: HBO's new documentary dives deep into the daily life of billionaire Warren Buffett

See Also:

SEE ALSO: HSBC: Saudi Arabia faces 'stagnation and decay'