Reuters reports that the proposed Saudi Aramco IPO has been put on hold and financial advisors working on the listing have been disbanded. Saudi Arabia’s Energy Minister denies the claim, saying the kingdom remains committed to the IPO. Bloomberg photo by Simon Dawson.
Aramco IPO called off “some time ago”: Reuters’ source
According to a report by Reuters, planning for the Saudi Aramco IPO has been called off. The proposed sale had been called the biggest stock flotation in history, but financial advisors working on the listing have been disbanded.
Sources tell Reuters that the kingdom has shifted its attention away from the Aramco IPO to the possible purchase of a “strategic stake” in Saudi Basic Industries Corp., a local petrochemicals maker.
“The decision to call off the IPO was taken some time ago, but no-one can disclose this, so statements are gradually going that way – first delay then calling off,” a Saudi source familiar with the IPO plans told Reuters.
“The message we have been given is that the IPO has been called off for the foreseeable future,” said a second source, a senior financial adviser.
“Even the local float on the Tadawul Stock Exchange has been shelved,” that source added.
Following the report, Saudi Arabia’s Energy Minister, Khalid al-Falih issued a denial about the shelving of the IPO.
“The government remains committed to the initial public offering of Saudi Aramco, in accordance with the appropriate circumstances and appropriate time chosen by the Government,” Khalid al-Falih said in a statement.
“This timing will depend on multiple factors, including favourable market conditions, and a downstream acquisition which the Company will pursue in the next few months, as directed by its Board of Directors,” added Falih.
In 2016, Crown Prince Mohammed bin Salman announced the plan to sell about 5 per cent of Saudi Aramco. The sale was seen as part of the prince’s drive to restructure the kingdom’s economy and cut its dependence on oil revenue.
Initial predictions were that the sale would value Saudi Aramco at $2 trillion or more. A number of industry experts questioned the validity of the value claim, which hampered the advisors’ process of preparing the Aramco IPO.
According to a Reuters’ source, the IPO “has been postponed until further notice,” but added that it could be revived in the future, if appropriate.
In June, the budget Saudi Aramco used to pay lawyers, bankers and auditors working on the deal ran out and has not been renewed.
“The advisers have been put on standby,” a fourth source, a senior oil industry official, told Reuters.