Saudi Arabia Denies Aramco IPO Is Canceled

From The Wall Street Journal

Saudi Arabia said Thursday it remained committed to publicly listing its national oil company at some point in the future, dismissing reports that the centerpiece of the country’s economic transformation plan had been canceled.

Energy minister Khalid al-Falih in a statement said the government would list Saudi Arabian Oil Co., better known as Aramco, when market conditions are favorable and once the oil giant had completed the multibillion-dollar acquisition of a state-owned chemicals firm.

“The government remains committed to the IPO of Saudi Aramco at a time of its own choosing when conditions are optimum,” said Mr. Falih, who is also chairman of Aramco.

His statement came amid reports the government had officially called off the listing. The Wall Street Journal also last month reported that preparations had stalled and that government officials doubted the IPO would ever go forward.

People close to the process reiterated Thursday that the listing isn’t likely to happen in the near term. The IPO’s financial advisers, HSBC Holdings PLC, JP Morgan Chase & Co. and Morgan Stanley have all redirected resources to other projects, although the Saudi government hasn’t officially declared the process dead, these people said.

“No one was ever told this is off. It is just assumed it is,” said a person close to the Saudi royal court.

First proposed by Saudi Crown Prince Mohammed bin Salman in January 2016, the IPO was originally meant to be completed last year and would have created the world’s biggest public company. The listing of roughly 5% of Aramco was billed as the main feature of Saudi Arabia’s national transformation plan, known as Vision 2030.

The proceeds of the public offer—up to $100 billion depending on the valuation—had been earmarked for the Saudi sovereign-wealth fund to use to diversify the country’s economy from its dependence on oil.

But the partial sale of the country’s prized asset also faced opposition from some quarters of the Saudi government and officials are now encouraging Aramco to buy a 70% stake in chemical firm Saudi Basic Industries Co. The Public Investment Fund owns the stake, which is worth roughly $70 billion, and could use the proceeds of the sale to make investments previously planned with the cash raised from the Aramco IPO.

Mr. Falih in the statement Thursday said the timing of an Aramco listing would depend on speed of the Sabic acquisition, which is expected to take months to complete.

The minister also said the oil giant has taken a number of steps that illustrate its continued commitment to a listing, including the appointment of a new board and investor relations team. The energy company also has made Aramco a joint stock company and undertaken the first independent certification of its hydrocarbon reserves, he said.

“This is all positive progress on what is a complex process, preparing the company and the Kingdom for what will ultimately be a global landmark market offering,” Mr. Falih added in the statement.



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