Saudi Arabian the most perspective company Aramco’s listing is likely to go ahead next year, said the UK officials. The visit of the royal last week made many things clearer, one of them is Aramco IPO’s delaying.
Aramco, the Saudi energy company with $2tn value, was targeted a late 2018 listing, but plans are delayed so far. Saudi Arabia wants to sell 5 percent of the world’s largest oil-producing company as part of an economic reform programme driven by the crown prince who visited the UK last week.
Meanwhile, Mohammed bin Salman faced several difficulties with Aramco IPO, which was has targeted a late 2018 listing, with shares to be sold on Saudi Arabia’s Tadawul exchange. But preparedness for the offering and willingness for a simultaneous or sequential flotation on a foreign exchange has been questioned.
Delays in IPO decision is pretty logical, Saudi Aramco’s finances and internal operations have been shrouded in secrecy for decades and its close relationship with the state has raised financial, legal and regulatory challenges. The British officials said that if Riyadh decided to list abroad they expected a domestic and foreign listing to take place around the same time, in the first or second quarter of 2019.
Khalid al-Falih, the energy minister, explained Aramco IPO delay:
“I would say litigation and liability are a big concern in the US . . . Saudi Aramco is too big and too important to be subjected to that kind of risk.”