Saudi Aramco Delays Launch of World’s Largest IPO

In yet another blow for what would be the world’s largest-ever IPO listing, Saudi Aramco is delaying its public debut for a second time in as many years, with fresh doubts emerging among investors over the hefty $2 trillion valuation…

  • The Saudi state oil giant had planned to publish its IPO prospectus and start listing shares by the end of October, the Wall Street Journal reported earlier.
  • The latest postponement comes at the last minute, just days before a planned launch, with banks still struggling to meet the high valuation the company is seeking, Bloomberg reported.
  • In a bid to better market the IPO to Wall Street investors, Aramco executives now want to delay the listing until December or January, so they can issue a new prospectus to include third-quarter figures on production, revenue and profit.
  • Aramco has faced numerous questions about the planned IPO—many analysts are skeptical about Crown Prince Mohammad bin Salman’s called-for $2 trillion valuation, and some big investors, like Fidelity, have reportedly been frustrated by a lack of information provided on the relationship between the oil giant and the Saudi state.
  • There have also been concerns about oil production after the September 14 drone and missile attacks on Aramco facilities, although the company’s CEO, Amin Nasser, has told CNBC that these had “no impact” on the planned IPO and full production would be restored by November.
  • If the listing is finally successful, about 2% of Aramco could be sold at a price valuing the company at $2 trillion, raising $40 billion—which would surpass the previous record for largest IPO: The $25 billion raised by Chinese e-commerce company Alibaba in 2014.

Crucial quote: “The company is ready and timing will depend on market conditions and be at a time of the shareholders’ choosing,” Aramco said in a statement about its preparations for the IPO.

Key background: The IPO listing was first announced by the crown prince in 2016, as part of his Vision 2030 economic and social reform program. But the IPO was first put on hold last year, amid concerns over valuation and disclosures.

What to watch for: The success of Aramco’s public listing will depend on…

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