Saudi Aramco abruptly postponed the launch of the world’s largest initial public offering (GM Sept. 27, p. 27) by at least a few weeks, according to a Bloomberg report late on Oct. 17, citing people briefed on the situation. The delay will give the array of Wall Street banks advising the Saudi state oil producer time to incorporate third-quarter results into their pre-IPO assessment valuations, said one of the sources. The banks are reportedly still struggling to meet the $2 trillion valuation the company is seeking.
The delay disrupts the plan to launch the share sale on Oct. 20, which would have ended with an IPO in late November. Now, a listing is unlikely before December or perhaps January.
Last year, Aramco delayed the IPO after more than two years of preparations as international investors balked at the $2 trillion valuation Crown Prince Mohammed bin Salman had put on the company.
This time Saudi Arabia opted for an easier route, deciding to start with a local listing only in Riyadh – ditching plans for a sale in London or New York – and enlisting local banks and wealthy families to support the IPO.
The Saudi government had seemed determined to press on with an accelerated schedule even in the face of potential headwinds that include weak oil prices, a slowing world economy, and last month’s attack on the company’s biggest processing plant, according to Bloomberg. While details of the proposed offer have not been made public, people involved in the transaction said earlier this month that about 2 percent of Aramco might be sold, raising $40 billion.