ARAMCO DELAYS IPO LAUNCH

Oil giant hoping Q3 results will bolster investor confidence after Sept 14 attack

SAUDI Aramco has delayed the planned launch of its initial public offering (IPO) in hopes that pending third-quarter results will bolster investor confidence in the world’s largest oil firm, said two sources on Thursday.

Aramco had been expected to announce plans next week to float between one and two per cent stake on the kingdom’s Tadawul market, in what would have been one of the largest-ever public offerings, worth upwards of US$20 billion (RM83.69 billion).

However, after a Sept 14 attack on its Abqaiq and Khurais plants temporarily knocked out half its crude output, the world’s top exporter wanted to reassure investors by first presenting results covering the period, said the sources.

“They want to do all that they can to hit the valuation target. Solid results after the attack will put them in a stronger position,” said one of the sources.

The second source confirmed the offering had been postponed, and there was currently no new date set for the listing.

Neither source knew when third quarter results were likely to come out.

“The company continues to engage with the shareholders on IPO readiness activities,” said Aramco. “The company is ready and timing will depend on market conditions and be at a time of the shareholders’ choosing.”

The news comes after Reuters reported on Sept 24 that the offering was unlikely to happen this year in light of the attacks.

The Financial Times, which initially reported the IPO delay on Thursday, cited a source as saying the listing was delayed by “weeks”.

Aramco halted plans for a blockbuster international listing of around five per cent last year amid debate over where to list overseas, but talks resumed this summer.

They were given impetus by the appointment of Yasir al-Rumayyan as chairman of Aramco.

A host of banks were given roles to arrange the listing.

Saudi investors see the listing as a chance to own part of the kingdom’s crown jewel and an opportunity to show patriotism after the attack.