RIYADH MAY DELAY ARAMCO IPO TO 2019

Timetable becoming increasingly tight with several key decisions yet to be made

SAUDI Arabia is preparing contingency plans for a possible delay to the initial public offering (IPO) of its state-owned oil company by a few months into 2019, according to people familiar with the matter.

While the government was still aiming for a Saudi Aramco IPO in the second half of next year, that timetable was increasingly tight for what’s likely to be the biggest share sale in history, said the people.

Saudi Aramco said in statement the IPO “remains on track. The IPO process is well underway and Saudi Aramco remains focused on ensuring that all IPO related work is completed to the very highest standards on time”.

The comment was echoed by a Saudi government source on Wednesday.

Several important decisions on the IPO have yet to be taken, stretching the ability of the company and its advisers to sell shares before the end of next year.

For example, Saudi Arabia has yet to announce where it will sell shares in Saudi Aramco other than the domestic stock exchange in Riyadh.

The country may not to make an announcement until late next month when it’s holding a big investment conference in Riyadh. The delay in selecting a foreign exchange, mostly likely here or New York, has had a knock-on effect on other preparatory work.

Saudi Arabia is also contending with weaker oil prices, which will help determine the value of Saudi Aramco. The government previously said the valuation might reach US$2 trillion.

Should Saudi Arabia achieve its valuation, the five per cent stake it plans to sell would raise about US$100 billion.

That would eclipse the US$25 billion raised by Alibaba Group Holding Ltd in 2014, the current record.

The IPO process is well underway and Saudi Aramco remains focused on ensuring that all IPO related work is completed to the very highest standards on time.

SAUDI ARAMCO