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Following an FT report from Friday, Saudi Aramco tweeted on Saturday that it had no intention of shelving its plan for an initial public offering in 2018. The company called the FT report “entirely speculative”.
The FT on Friday quoted sources as saying the Saudi state energy company was considering foregoing a foreign listing, and instead opting for a private share sale in addition to the home-bourse listing. 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.
This is the second media report about Aramco’s much-hyped IPO that the company has been quick to reject. Last month, sources told Bloomberg the Saudi government had come up with contingency plans for a possible delay. The sources didn’t go into detail about what the drivers behind the delay could be. A day after the report’s publication, Aramco sent an email to media dispelling the notion that the IPO could be delayed, saying instead that the IPO was indeed on track.
This second report rejection comes on the heels of another related story: UK’s Financial Conduct Authority has admitted it held talks with Aramco officials a few months prior to proposing a change in LSE’s listing rules in a bid to accommodate the Saudi oil titan.
FCA’s listing rules currently require that any company wishing to opt for a premium listing needs to list at least 25 percent of its shares. Aramco, however, plans to only float 5 percent of its stock – a much-anticipated event planned for the second half of 2018.
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The London Stock Exchange has been seen as the preferred foreign venue for the Aramco IPO. Yet, 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.
The conflicting reports about the direction of Saudi appear to signal a lack of unity among top advisors and the crown prince, who has the final say, on the issue.
By Irina Slav for Oilprice.com
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Irina is a writer for Oilprice.com with over a decade of experience writing on the oil and gas industry.