Abu Dhabi, UAEThursday 21 November 2019

Aramco says IPO timing depends on market conditions

Oil giant was expected to launch first of two-stage listing in coming week but decided to push trading date back to December or January

A view shows branded oil tanks at Saudi Aramco oil facility in Abqaiq, Saudi Arabia October 12, 2019. REUTERS/Maxim Shemetov/File Photo
A view shows branded oil tanks at Saudi Aramco oil facility in Abqaiq, Saudi Arabia October 12, 2019. REUTERS/Maxim Shemetov/File Photo

Saudi Aramco on Sunday said the timing of its long-awaited stock market debut "will depend on market conditions" in the latest delay to its initial public offering.

The IPO is the cornerstone of a reform programme conceived by Saudi Crown Prince Mohammed bin Salman to wean the economy off its reliance on oil.

Aramco was expected to launch the first part of a two-stage listing in the coming week but decided to push the trading date back to December or January, a source said on Thursday.

Sources said in mid-September that the offering could be delayed after the attack on Saudi oil facilities knocked out half of the output of the world's top crude exporter.

"The company continues to engage with the shareholders on IPO readiness activities," Aramco said.

"The company is ready and timing will depend on market conditions and be at a time of the shareholders' choosing..

Aramco has envisioned a two-stage listing, with about 2 per cent of the capital trading on the Tadawul exchange in Saudi Arabia and an additional three percent on a foreign exchange.

With a $2 trillion valuation, the 5 per cent sale could raise about $100 billion in what would be the largest IPO ever. It would eclipse the 2014 listing of Alibaba, which raised $25bn.

Aramco sits on 263 billion barrels of crude oil and 320 trillion cubic feet of natural gas, much more than any other private or state oil company, and the firm reports impressive earnings.

The company's expected dividend yield is well below those offered by most of the world's major oil firms, said Russ Mould, director at Bell Investment.

Updated: October 21, 2019 04:03 AM

SHARE

SHARE