Published: Sat, October 19, 2019
Markets | By Otis Pena

Saudi Aramco IPO Delayed, Wants To Reassure Investors With Earnings Update First

Saudi Aramco IPO Delayed, Wants To Reassure Investors With Earnings Update First

The formal announcement had been envisaged as soon as October 20.

The earlier report, from the Financial Times, cited sources in the know who said that after the government granted its approval for the listing, the Aramco board of directors would give it the go-ahead.

SAUDI Aramco plans to push back its initial public offering, which had been expected to be launched next week, a person familiar with the situation said yesterday.

It aims to raise up to $100 billion based on a $2 trillion valuation of the company, but investors have debated whether Aramco is worth that much and there have been repeated delays to the launch originally planned for past year.

The mammoth initial public offering (IPO) forms the cornerstone of a reform programme envisaged by the kingdom's de facto ruler Crown Prince Mohammed bin Salman to wean the Saudi economy off its reliance on oil.

In a statement to Reuters on Friday, Saudi Aramco said: "The company continues to engage with the shareholders on IPO readiness activities".

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The strikes on Abqaiq - the world's largest oil processing facility - and the Khurais oil field in eastern Saudi Arabia last month roiled energy markets and are the reason behind the delay in Saudi Aramco's listing, says a source. "The company is ready and timing will depend on market conditions and be at a time of the shareholders choosing". On the other hand, the Financial Times wrote the listing will be delayed by "weeks".

Saudi Aramco was declared the most profitable company in the world after it published its financial results for the first time, disclosing that it made $111 billion in profits back a year ago.

"They want to do all that they can to hit the valuation target".

The delay was triggered by investor concern following the attack on its Abqaiq and Khurais plants In September which had knocked out almost half of the kingdom's crude output.

One of these people said the company wanted to wait until it could provide investors clarity on its most recent quarterly earnings after attacks on Saudi infrastructure last month that temporarily halved production.

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