• 2 minutes Rational analysis of CV19 from Harvard Medical School
  • 4 minutes While U.S. Pipelines Are Under Siege, China Streamlines Its Oil and Gas Network
  • 7 minutes Renewables Overtake Coal, But Lag Far Behind Oil And Natural Gas
  • 2 hours Joe Biden the "Archie Bunker" of the left selects Kamala Harris for VP . . . . . . Does she help the campaign ?
  • 9 hours Trump Hands Putin Major Geopolitical Victory
  • 4 hours Tesla Begins Construction Of World’s Largest Energy Storage Facility
  • 2 hours America Could Go Fully Electric Right Now
  • 4 hours Those Nasty White People and Camping Racism
  • 1 day China wields coronavirus to nationalize American-owned carmaker
  • 3 hours Will any journalist have the balls to ask Kamala if she supports Wall Street "Carried Interest" Tax Loophole
  • 1 day COVID&life and Vicious Circle: "Working From Home Is Not Panacea For Virus"
  • 2 days Open letter from Politico about US-russian relations
  • 5 hours The Truth about Chinese and Indian Engineering
  • 14 hours Brent above $45. Holding breath for $50??
  • 24 hours Oil Tanker Runs Aground in Mauritius - Oil Spill
  • 2 days Trump is turning USA into a 3rd world dictatorship
  • 3 days US will pay for companies to bring supply chains home from China: Kudlow - COVID-19 has highlighted the problem of relying too heavily on one country for production

Aramco IPO Remains On Track, Company Says

Aramco’s initial public offering remains on track for next year, the company told UAE’s The National in an email, following a report that suggested the initial schedule might be delayed.

The delay, sources told Bloomberg yesterday, would be because of a number of still unresolved issues around the offering, which many believe could be the biggest IPO in history, beating Alibaba’s US$25-billion initial placement by as much as US$75 billion.

“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 statement read.

The issues around Aramco’s listing include the valuation of the company and the location of its secondary listing, besides its home bourse in Riyadh. Although Saudi estimates peg Aramco’s worth at as much as US$2 billion, external estimates have questioned the accuracy of this calculation, suggesting it might be significantly overblown.

If the valuation of the company is based solely on its reserves—a staggering 266 billion barrels—the value of each of those barrels is particularly important. At US$7 or US$8 a barrel, the US$2 trillion valuation seems possible. But that’s not all that IPO valuations are based on. Everyone is waiting for Aramco’s release of its financial results in 2018. It would need to report EBITDA of US$130 billion for the US$2-billion valuation scenario to become a reality.

Related: Is Russia Pushing Saudi Arabia Out Of Asia?

Then there’s the question of the secondary listing. At the moment, the London Stock Exchange is the frontrunner for the deal, after the UK’s financial markets watchdog decided to tweak its listing rules to accommodate the Saudi company.

However, this has led to a backlash from corporate governance groups and members of parliament, who are questioning the motivation behind the FCA’s proposal to add a special category for Aramco in its premium listing rules. 

By Irina Slav for Oilprice.com

More Top Reads From Oilprice.com:



Join the discussion | Back to homepage



Leave a comment

Leave a comment

Oilprice - The No. 1 Source for Oil & Energy News