Oil giant Saudi Aramco is thinking about reneging on its much talked about plans to publicly list a 5% stake in the company, Financial Times sources said on Friday.
Last month, the Saudi government came up with contingency plans for a possible delay, according to Bloomberg sources, which didn’t go into detail about what the drivers behind the delay could be. A day after media reported that the IPO could be delayed, Aramco sent an email to media dispelling the notion that the IPO could be delayed, saying instead that the IPO was indeed on track.
“The IPO process is well underway and Saudi Aramco remains focused on ensuring that all IPO related work is completed to the very highest standards on time,” the September 15 statement read.
Aramco had not yet decided on a location for its secondary listing, but was considering the London Stock Exchange and the New York Stock Exchange—a listing that could be valued at as much as $100 billion. But an international listing poses unique challenges for the oil titan, which may struggle to conform to foreign listing rules that demand transparency and may prevent Aramco from participating in OPEC production quotas, which may be viewed as price fixing as far as the United States is concerned.
But now, neither stock exchange may get a piece of the pie, as Aramco is reportedly considering selling its shares privately, rather than publicly. Talks with private investors and sovereign wealth funds have picked up in recent weeks, according to Financial Times sources. Private sales discussions have included the government of China.
A Saudi Aramco spokesperson told CNBC that "a range of options, for the public listing of Saudi Aramco, continue to be held under active review. No decision has been made and the IPO process remains on track."
By Julianne Geiger for Oilprice.com
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