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Moelis & Co has won the advisory mandate for the planned IPO of Saudi Aramco, according to three people familiar with the process, scoring the New York independent firm the biggest equity advisory mandate in history.
Winning the hotly contested mandate represents a coup for the boutique investment bank, which was founded by Ken Moelis in the midst of the financial crisis in 2007.
Saudi officials hope to turn the state-owned oil group into the world’s most valuable publicly traded company, with a valuation of about $2tn.
Those close to the IPO planning have said the sale of a 5 per cent stake should happen next year, although the number of shares sold could increase, and the timing could slip.
Moelis declined to comment.
Saudi Aramco’s IPO is part of a transformation plan, envisaged by Saudi Arabia’s power broker deputy crown prince, Mohammed bin Salman, which seeks broad-based privatisation to boost employment and diversify the kingdom away from oil.
Prince Mohammed believes the privatisation could value Saudi Aramco at $2tn.
A successful flotation aims to use the IPO proceeds for investments in non-oil industries in order to wean the country off its most precious resource.
Banks, advisory firms and consultancies have scrambled to secure work on the IPO since Saudi officials announced their intention a year ago. JPMorgan, which has been Saudi Aramco’s commercial banker for years, and Michael Klein, a former star Citigroup banker, are working with the Saudi authorities on a broad range of matters including the IPO.
Other banks have provided informal advice to the company on the prospective IPO and have made several visits to Saudi Arabia to get a slice of the action.