Saudi Arabian Oil Co. (Aramco) has chosen the New York-based boutique investment bank Moelis & Co to advise on its initial public offering, reports say.
The sale of the world’s biggest oil company is the latest of several moves by the Saudi government to generate revenues in the face of a gaping budget deficit.
Aramco had invited banks in January to pitch for an advisory position on what is expected to be the world’s biggest initial public offering.
JPMorgan, which has been Aramco’s commercial banker for years, and Michael Klein, a former star Citigroup banker, had been advising Saudi authorities on the IPO.
However, the kingdom’s decision to pick a small banker has surprised many observers. International business outlets such as Bloomberg and the Financial Times said the choice represents a coup for Moelis founded no sooner than 2007.
The IPO, which is predicted to raise about $100 billion, is set to yield millions of dollars in fees and push Moelis up in global investment bank rankings.
Last year, Moelis hired Shlomo Yanai, a retired Israeli military officer, to join the firm as a senior adviser. Yanai had earlier been offered the directorship of the Israeli spy agency Mossad by Prime Minister Benjamin Netanyahu but he turned it down.