Saudi Aramco IPO delayed until 2019

LONDON:

The initial public offering of oil giant Saudi Aramco may be delayed until 2019 at the earliest, the Financial Times reported, citing British officials briefed on the matter.

The IPO, potentially the largest stock sale ever, had been scheduled for the second half of 2018, amid efforts to select an international venue for its listing.

FT on Sunday cited several officials as saying they were “warned by their Saudi counterparts” of the delay.

The newspaper said the delay came as the company struggled to arrive at a $ 2 trillion valuation sought by Saudi Crown Prince Mohammed bin Salman.

The powerful crown prince, who has consolidated his grip on various sectors in Saudi Arabia since his appointment in June, is overseeing the kingdom’s plan to sell under five percent of the state- owned oil giant.

Aramco neither confirmed nor denied the FT report.

“In addition to listing on Tadawul — the home exchange — a range of international options are being held under active review,” an Aramco spokesman told AFP.

“Appropriate decisions will be made in due course.”

Saudi Arabia had laid out plans for Aramco’s dual listing on the Saudi stock market and an international exchange, with markets in New York, London and Hong Kong vying for the offering.

The FT report said London had a “good chance” of securing the listing, citing insiders briefed on the negotiations.

Saudi Energy Minister Khalid al- Falih told CNN last week that “litigation and liability are a big concern in the US”.

“Saudi Aramco is too big and too important for the kingdom to be subjected to that kind of risk,” the minister added.

Experts had predicted the IPO delay, given the complexity of the transaction. Research firm Capital Economics has said it was unlikely to significantly impact the kingdom’s near- term economic outlook.

The IPO forms the cornerstone of the petro- state’s reform programme to wean the economy off its reliance on oil revenues.

Until 2014, oil income made up more than 90 percent of public revenues in Saudi Arabia.

But following a protracted global oil slump, the kingdom is seeking to diversify its economy and privatise some state assets alongside new measures such as a value- added tax.