Saudi Aramco said the idea remains on track to offer shares to the public, after a newspaper report said the company was considering shelving its IPO.
“A range of options, for the public listing of Saudi Aramco, continue to be held under active review. No decision has been made as well as the IPO process remains on track,” a spokesman said. The comment echoes public statements made within the past week by both Khalid Al-Falih, Saudi energy minister, as well as Saudi Aramco President Amin Nasser.
although the report within the Financial Times echoed speculation of which has been circulating as Saudi Aramco officials debate how as well as when to issue shares. The report is actually also the latest in a series to cast doubt on the massive IPO which could be all 5 percent of what could be the globe’s largest listed oil company.
One source close to the IPO told CNBC of which one thing under review is actually whether to list on the Saudi market first as well as then list on an international exchange at a later date. The source said the debate is actually understood to be between a London or completely new York listing, given the need for substantial capital market to raise such large sums.
The newspaper report quoted all 5 unidentified sources saying of which talks about a sale to a foreign government, including China, as well as some other investors have picked up in recent weeks, amid concerns about the feasibility of a foreign listing.
An energy market source said talks with Asian sovereign wealth funds as well as western institutions have been ongoing since the idea of the IPO was first floated.
“The definition of an IPO could also mean private placement with Asian sovereign wealth funds,” the source said. “They’ve been in discussions with them about the IPO through the beginning.”
The source added of which the difficulties of a listing , including the transparency requirements are certainly a consideration for Aramco, which is actually government owned as well as intertwined with the bureaucracy of the kingdom.
“Saudi Aramco thinks by years, if not decades as well as financial markets think quarter by quarter,” said the source.
Helima Croft, head of global commodities research at RBC, notes of which all previous stories about issues or delays with the 2018 IPO have been quickly denied.
“I think the idea is actually always worth remembering of which a key goal of the Aramco sale was to yield $100 billion for the Public Investment Fund. Private placement may simply be the easier way to get to of which goal in 2018,” said Croft.
The speculation also swirled just ahead of a conference in Riyadh later This particular month for global investors on the future investment initiatives by the Public Investment Fund.
There’s a lot at stake for bankers on the deal.
Rich Peterson of S&P Global Market Intelligence estimates having a 1 percent figure for underwriters, the shelving of the IPO could result in a $500 million loss for each $50 billion IPO sale.
–CNBC’s Patrick Allen contributed to This particular story.