Khaleej Times

Aramco’s potential Sabic deal to affect IPO timing, says CEO

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riyadh — Saudi Aramco’s potential acquisitio­n of a stake in petrochemi­cals maker Sabic would affect the time frame of its own planned initial public offering, the firm’s chief executive, Amin Nasser, said in a TV interview transcript.

The offering is the centrepiec­e of an ambitious plan championed by Crown Prince Mohammed bin Salman to diversify Saudi Arabia’s economy beyond oil, but preparatio­ns for the IPO, which could prove the biggest in history, have slowed.

Saudi-owned Al Arabiya television cited Nasser as saying that buying a stake in a petrochemi­cals company would make the state oil giant less vulnerable to price volatility.

“If the deal is completed, with relevant regulation­s taken into account, it will definitely affect the timeframe for the partial IPO of Saudi Aramco,” he was quoted as saying on Friday in the transcript provided by a government media office.

The interview has yet to air on television.

Aramco said on Thursday it was looking to buy a strategic stake in Sabic, which could boost its market valuation ahead of a planned IPO.

When Aramco is ready to list, the IPO timing would be up to the government to decide, Nasser said.

“As I said in previous interviews, when Saudi Aramco is ready, the decision of going ahead with the IPO is for the state to make,” he said

On Thursday, Aramco said it was in “very early-stage discussion­s” with the kingdom’s Public Investment Fund (PIF) to acquire the Sabic stake in a private transactio­n, and had no plans to acquire any publicly held shares.

Riyadh-listed Saudi Basic Industries Corp (Sabic), the world’s fourth-biggest petrochemi­cals company, is 70 per cent owned by the PIF, Saudi Arabia’s top sovereign wealth fund. It has a market capitalisa­tion of SR385.2 billion ($103 billion).

Nasser also said Aramco had a long-term goal to convert two million to three million barrels of its oil products into chemicals.

Reuters reported on Wednesday that Saudi Aramco had invited banks to pitch for an advisory role on the potential acquisitio­n of a strategic stake in Sabic, citing two

If the [Sabic] deal is completed, with relevant regulation­s taken into account, it will definitely affect the timeframe for the partial IPO of Saudi Aramco

Amin Nasser, CEO of Saudi Aramco

sources with direct knowledge of the matter.

Some sources close to the Saudi Aramco IPO process have said the plans for a domestic and internatio­nal listing might be pushed further into next year or beyond.

A final decision has yet to be made by Prince Mohammed, who oversees the kingdom’s economic and oil policies, the sources said. Saudi Arabia’s energy minister, Khalid Al Falih, said last month it would be “nice” to see Aramco floated in 2019, adding that the timing was not critical to the government.

Aramco plans to boost investment­s in refining and petrochemi­cals to secure new markets and sees growth in chemicals as central to its downstream strategy to cut the risk of an oil demand slowdown.

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