LONDON/DUBAI (Financial Times) -- Saudi Aramco has published its long-awaited prospectus for its initial public offering, tipped to be the biggest on record, but left investors guessing on key details such as the number of shares on offer, the price range or even an indicative date for the listing.
The 658-page document released on Saturday marks the furthest the kingdom has gone in its efforts to list shares in the country's biggest revenue earner, almost four years after Crown Prince Mohammed bin Salman first disclosed plans to take the company public.
After repeated delays, largely stemming from questions over the company's ability to secure the $2tn valuation target sought by Prince Mohammed, it is set for a stock market listing in Riyadh as early as next month.
If all goes to plan, Saudi Aramco will have non-government shareholders for the first time in nearly four decades. But the incomplete disclosures will stand as a test of investors' willingness to leave themselves open to the whims of the kingdom's highest authorities.
"An initial public offering in the Kingdom of this kind and size is unprecedented," Saudi Aramco said.
The total number of shares in the company amounts to 200bn. The document revealed that up to 0.5 per cent of the offering - or 1bn shares - will be offered to retail investors, but did not disclose the proportion to be sold to institutions.
People familiar with the process have said the kingdom is seeking to sell 1 to 3 per cent of the company in total, raising $20bn-$60bn. Other people say Prince Mohammed has lowered his slights on valuation, with investors believing the company is worth between $1.2-1.5tn.
Saudi Aramco had previously said that crucial details for the listing on the Tadawul exchange would be revealed after the book-building period. In the prospectus it said this will take place between November 17 and December 4. The final price for the IPO is expected to be announced a day later.
The government will not list new shares under a six-month statutory lock-up period, and will enter a contractual lock-up period of 12 months, during which time it will not be able to sell any more shares except to foreign governments and overseas state-related strategic investors.
Saudi Aramco has already made a series of moves to entice investors - from changing royalty payments and tax rates to announcing a mega minimum dividend of $75bn a year.
The prospectus said the government would sell $1bn of shares at the final offer price to Saudi Aramco for use in a corporate share plan.
Despite dangling the prospect of significantly high payouts, the company on Saturday warned that it may change its dividend policy without prior notice to its minority shareholders.
Among other risk factors, the oil company - the world's largest producer - said it was vulnerable to fluctuations in commodity prices, reliance on Asian consumers, political and social unrest and terrorism. Attacks on key energy facilities temporarily halved the kingdom's oil production in September.
The prospectus shows a near 30-per cent drop in Saudi Aramco's net income in the third quarter from a year earlier, to $21.3bn, squeezed by the impact of the attacks and of lower crude prices. The company said it did not expect the hit to its infrastructure to have a "material impact" on its business.
Saudi Aramco also said that concerns over climate change could "reduce global demand for hydrocarbons". Research commissioned by the company forecasts that oil demand will peak from 2035. Even so, the kingdom has long maintained it will be the last producer standing because of its low costs.
For much of this year Saudi Aramco produced 10m barrels a day, and has a maximum capacity of 12m b/d.
The company flagged risks of climate-related litigation, and also raised concerns about antitrust suits in the US connected to Saudi Arabia's membership of Opec, which could test Saudi Aramco's ability to rely on a sovereign immunity defence.
Despite trying to untangle its operations and accounts from the state, the company said that the government will dictate production decisions and could direct it to undertake projects "outside the Company's core business".
Saudi Aramco said that it will be compensated for such work. But it will still pay up to $100m a year to fund "services and studies" for the energy ministry.
Saudi Aramco did not disclose fees for bankers that include Citigroup, Credit Suisse, Goldman Sachs, HSBC, JPMorgan, Bank of America, Morgan Stanley and two domestic banks in Saudi Arabia. Goldman Sachs has been selected as the "stabiliser" of the shares in the secondary market.
The company, which ranks as the world's most profitable by net income, revealed some basic financial data earlier this year when it issued a debut $12bn bond - information that for decades has remained a closely guarded secret. In August it reported $47bn of net profits for the first half of the year - more than double Apple's haul over the same period.