Aramco listing plan halted, oil giant disbands advisors
LONDON/RIYADH (Reuters) - Saudi Arabia has called off both the domestic and international stock listing of state oil giant Aramco, billed as the biggest such deal in history, four senior industry sources said.
The financial advisors working on the proposed listing have been disbanded, as Saudi Arabia shifts its attention to a proposed acquisition of a “strategic stake” in local petrochemicals maker Saudi Basic Industries Corp 2010.SE, two of the sources said.
“The decision to call off the IPO was taken some time ago, but no-one can disclose this, so statements are gradually going that way -
Saudi Aramco did not immediately respond to an emailed request for comment. The Saudi Royal Court had no immediate comment.
The proposed listing of the national champion was a central part of Crown Prince Mohammed bin Salman’s reform drive aimed at restructuring the kingdom’s economy and reducing its dependence on oil revenue.
The prince announced the plan to sell about 5 percent of Aramco in 2016 via a local and an international listing, predicting the sale would value the whole company at $2 trillion or more. Several industry experts however questioned whether a valuation that high was realistic, which hindered the process of preparing the IPO for the advisors.
Stock exchanges in financial centers including London, New York
An army of bankers and lawyers started to fiercely compete to win advisory roles in the IPO, seen as a gateway to a host of other deals they expected to flow from the kingdom’s wide privatization program.
The prince announced the plan to sell about 5 percent of Aramco in 2016 via a local and an international listing, predicting the sale would value the whole company at $2 trillion or more. Several industry experts however questioned whether a valuation that high was realistic, which hindered the process of preparing the IPO for the advisors.
Stock exchanges in financial centers including London, New York
An army of bankers and lawyers started to fiercely compete to win advisory roles in the IPO, seen as a gateway to a host of other deals they expected to flow from the kingdom’s wide privatization program.
“The message we have been given is that the IPO has been called off for the foreseeable future,” said one of the sources, a senior financial advisor.
“Even the local float on the Tadawul Stock Exchange has been shelved,” the source added.
Saudi energy minister and Aramco chairman Khalid Al Falih said in the company’s 2017 annual report, released in August, that Aramco “continued to prepare itself for the listing of its shares, a landmark event the company and its board anticipate with excitement.”
Aramco had a budget which
“The advisors have been put on standby,” a third source, a senior oil industry official said.
“The IPO has not been officially called off, but the likelihood of it not happening at all is greater than it being on.”
Sources have previously told Reuters that in addition to the valuations, disagreements among Saudi officials and their advisers over which international listing venue to be chosen had slowed down the IPO preparations.
Reporting by Clara Denina, Alex Lawler, Marwa Rashad and Rania El Gamal, additional reporting by Stephen Kalin. Editing by David Evans
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