Aramco delays world’s biggest IPO: sources

LONDON/NEW YORK Saudi Aramco has postponed the launch of the world’s largest initial public offering by at least a few weeks, according to people briefed on the situation.

The delay gives bank analysts time to incorporate Aramco’s third-quarter results into their pre-IPO assessment of the company, said one of the people, who asked not to be named discussing confidential deliberations.

The move was abrupt, given that Aramco had been preparing for an official launch of the share sale on Oct. 20.

While the latest delay may only be a few weeks, it’s likely to add to investor skepticism about the deal’s prospects. The original plan for a listing in Riyadh and an international exchange was shelved in 2018 after international investors balked at the company’s valuation.

The Saudi government had seemed determined to press on in the face of potential headwinds that include weak oil prices, a slowing world economy and last month’s attack on the company’s biggest processing plant.

While details of the offer haven’t been made public, people involved in the transaction said earlier this month that about two per cent of Aramco might be sold at a price that would value the entire company at US$2 trillion, raising US$40 billion and easily exceeding the US$25 billion raised in 2014 by Chinese e-commerce giant Alibaba Group Holding Ltd.

The shares were set to trade only on Riyadh’s stock exchange, the Tadawul.

Ever since Crown Prince Mohammed bin Salman first mooted the IPO of the kingdom’s most prized assets in early 2016, Aramco’s valuation has been contentious.