The Saudi Arabian government prepares for the IPO of the century.
In less than one week the Future of Investment Initiative will bring together 3200 business executives and investment funds from around the world to discuss the mass privatization of Saudi Arabian companies, including the largest oil company in the world, Aramco.
(If the Saudi government is attempting to appeal to global investors with their promotional communication, it would be advised to not use white font for the English sub-titles.)
The Saudis intend to bring five percent of Aramco to the financial markets in London or New York – the choice has not been officially announced. But people are speculating that crown prince Mohammad bin Salman is having second thoughts. Advisors involved with the IPO have indicated that they are also considering selling privately to the Chinese government as well as to some of the world’s biggest sovereign wealth funds and institutional investors.
Once more details about the IPO become clear, the Saudi government is still not obliged to be transparent about any part of the process to the public – not even about their reserves, which they claim are comprised of 260 billion barrels of crude.
If the IPO is cancelled, investors would be sorely disappointed – but for the professionals who have been hired on to steer it in the public arena, it may be disastrous.
The Aramco IPO is simply unprecedented in terms of its sheer corporate communications complexity.
Reuters reported earlier this year that an advisory firm had been appointed to run the external and media communications for the IPO as well as a prominent consultancy agency managing investor relations. The decision to split the role underscores the mammoth task of handling the IPO of a company valued at approximately 2 trillion USD.
Saudi Arabia has apparently also taken steps to launch a global PR offensive to counter negative press, hoping to open “hubs” in London, Berlin, Paris and Moscow this month, and has been spending millions of dollars on lobbyists to counter its Qatar’s allegations that it sponsors terrorism.
This begs the question: after the recent scandal surrounding a PR firm’s entanglement with the South African government, which PR firms would be interested in taking the Saudis on as a client? In reality, there are likely several firms out there who would take on the challenge – as long as they can remain anonymous.
If Aramco will indeed IPO in late 2018, these corporate communications professionals – whomever they are – have a daunting year ahead of them.