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After months of tireless assurances by Riyadh officials that the Aramco listing is going according to plan and will take place as scheduled in the second half of this year, now the Financial Times has let the cat out of the bag. Quoting British government sources, the daily said the Aramco IPO will most likely take place next year.
The sources, wishing to remain unnamed, said their Saudi counterparts had warned them about the delay, adding that the international listing could happen even later. Still, the good news for the British government is that London is still a favorite for that international listing.
On the other hand, nothing is certain, as Crown Prince Mohammed favors New York and hopes U.S. legislators will offer the Kingdom regulatory concession to make that listing possible.
This favor for New York is not unanimous, however. Last week, Energy Minister Khalid al-Falih told CNN that the risk of litigation after Congress passed a post-9/11 law allowing U.S. citizens to sue Saudi citizens is too great for a company the size and importance of Aramco.
Hong Kong is emerging as an increasingly like compromise solution: it does not have as strict transparency rules as either the London Stock Exchange or NYSE, and it will allow Saudi Arabia to tap more Chinese capital, which is not something to be ignored.
Meanwhile, other problems are coming to the surface, too. The FT notes how the Kingdom’s advisers on the IPO have been finding it difficult to achieve the US$2-trillion valuation that Prince Mohammed is eyeing. The valuation is crucial for his Vision 2030 economic reform program.
Preparatory work on the part of Aramco has also been slow. Despite assurances that all is going well, now the company’s CEO has said that Aramco is not in fact ready with the documentation, contrary to earlier remarks from Saudi officials that all preparatory work has been done and the one thing left is the final decision. Now Amin Nasser told British business leaders at a meeting that the preparatory work will be done by the end of the year.
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.