Friday 19 October 2018

Saudi 'may delay international part of Aramco IPO'

RIYADH, October 14, 2017

Saudi Arabia is considering delaying the international portion of the giant initial public offering of its state oil company until at least 2019, according to people familiar with the situation
The domestic share sale in Riyadh could still happen next year, reported Bloomberg.
A two-stage Saudi Aramco IPO is one of several options being considered, the people said, asking not to be identified because discussion are private. 
Another plan would include listing in Riyadh next year and privately selling a stake in Aramco to one or several cornerstone investors, one of the people said.
The IPO is the centerpiece of a broad-ranging economic reform program proposed by Crown Prince Mohammed bin Salman. 
Any delay would be a setback to his plans as well as the plethora of International investment banks and international exchanges eyeing millions in fees and commissions.
Saudi Arabia has been making contingency plans for a possible delay of the IPO, expected to be the largest in history, Bloomberg News had reported last month. 
While the government has insisted the original timetable remains on track, several important decisions have yet to be taken, including a location for the international listing, stretching the ability of the company to sell shares overseas before the end of next year, it added.
Despite the work on alternative plans, Saudi Arabia said earlier this month that schedule for the blockbuster initial public offering wasn’t "slipping" and the country still planned a sale by the end of 2018.
The government is “moving right ahead” for an IPO of Saudi Aramco in the second half of next year, Oil Minister Khalid Al-Falih said in Moscow. 
“There is nothing to indicate that schedule is slipping in any way,” he added.
However, The Financial Times has reported that Saudi Arabia could shelve the international portion of the IPO, instead opting for a local listing in 2018 combined with a stake sale to a Chinese investor.
The government has said the sale of 5 per cent of the shares could value the company at as much as $2 trillion, though analysts have tended to give lower estimates, said the sources.
If Saudi Arabia achieves its valuation, the 5 per cent stake it plans to sell would raise about $100 billion. That would eclipse the $25 billion raised by Alibaba Group in 2014, they added.
London and New York exchanges are vying for a role in Aramco IPO, with Hong Kong, Singapore, Tokyo and Toronto also trying to attract the sale. 

Tags: IPO | Saudi Aramco | Riyadh |

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