
Saudi denies reports of shelving Aramco’s massive IPO
- Riyadh has moved to quash reports that the Aramco IPO has been called off
- If successful, the IPO could net the Saudi government about $100 billion in investment
- London, New York, and Hong Kong are the top contenders of Aramco’s listing
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Saudi Arabia’s capital Riyadh has dismissed reports the decision by Aramco to go public has been rescinded. The state-owned oil company is said to be gearing up for a major public offering that will see it surrender a 5% shareholding to “outsiders”.
With an estimated value of $2 trillion, floating 5% shares of the company would net about $100 billion for the Arabian company. While a fixed date for the IPO is yet to be set, the company reaffirmed its commitment to going public, soon. The dismissal by Riyadh comes only two days after news of Aramco’s plan to call off the mega IPO emerged.
On Wednesday, news sources indicated that the Saudi government had pulled its local and international listings, and disbanded the deal’s advisors.
The kingdom plans to issue its IPO on an international market with New York and London being major targets. But chances of an international listing may be “diminishing.
For months now, various cities around the world including New York and London have been fronting themselves for the multi-billion-dollar deal. Reuters reported on Tuesday that sources close to the deal are now worried that the planned international public listing may be hanging in the balance.
“I would guess it is about evens that there will be no international IPO,” a high-level source disclosed.
On Thursday, Saudi Arabia’s energy minister Khalid al-Falih moved to clear any doubts about the IPO:
“The government remains committed to the initial public offering of Saudi Aramco, in accordance with the appropriate circumstances and appropriate time chosen by the government,” Khalid said.
Reuters also reported that the Arabian state said “it had undertaken a number of major preparatory measures, including issuing a new income tax law as it relates to hydrocarbons activities; reissuing a long term exclusive concession; and appointing a new board of directors, amongst other measures to safeguard its interests and those of the company’s future private shareholders”.
Saudi Arabia’s assurance comes as a relief to potential investors, hosting cities, and bankers and advisors who are looking to walk away with about $200 million in floatation and consultancy fees.
Word on the street is that the deal’s potential hosts have been narrowed down to three – London, Hong Kong, and New York. However, with Hong Kong’s current unrest in its IPO market, the list is likely to get even narrower.
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