Saudi Arabia announced the status change of its state oil giant Saudi Aramco which is now a joint-stock company, a necessary change ahead of the planned IPO later this year.
The status change came into effect as of Jan. 1, according to cabinet decree on Friday in an official government bulletin on Um al Qura website.
Saudi Aramco share sale of up to 5 percent of Saudi Aramco, expected to go ahead in the second half of 2018, is at the heart of an ambitious economic reform plan meant to reduce dependency on crude exports. The plan, called Vision 2030 is spearheaded by Saudi crown Prince Mohammad bin Salman.
Local companies in Saudi Arabia are reportedly required to change their status ahead of listing.
Saudi Aramco’s status change highlights an important step towards the IPO process, which could be the biggest in history raising up to $100 billion.
The decree also said the state will retain the direct ownership of the majority of the shares in the company and the council of ministers will decide the first board of directors of Saudi Aramco, based on the proposal of the Minister of Energy.