Saudi Aramco’s global listing in doubt as Riyadh explores private sale

Talks over private sale to foreign governments including China have gathered pace

Amin Nasser, chief executive and president of Saudi Arabian Oil Company Saudi Aramco: The Saudi state oil company has struggled to select a suitable international venue for its shares

Amin Nasser, chief executive and president of Saudi Arabian Oil Company Saudi Aramco: The Saudi state oil company has struggled to select a suitable international venue for its shares

 

Saudi Aramco is considering shelving plans for an international listing in favour of a private share sale to the world’s biggest sovereign wealth funds and institutional investors.

Talks over a private sale to foreign governments including China and other investors have gathered pace in recent weeks, according to five people familiar with the initial public offering preparations, as concern for the feasibility of an international listing has grown.

The Saudi state oil company has struggled to select a suitable international venue for its shares, as New York and London have vied for what has been billed as the biggest ever flotation.

No final decision

The company would still aim to list shares on the Saudi kingdom’s Tadawul exchange next year if it pursues the private sale, the people said. No final decision has yet been made and an international listing could still occur next year.

If Saudi Aramco pursues the private share sale option, an international listing could also follow, but probably not until at least 2019. Some advisers are concerned it could forgo an international listing altogether, according to one person involved in the talks.

The latest proposal by its financial advisers was described by one person as a “face saving” option for Saudi Aramco, which has worked on plans to list its shares internationally for more than a year. One person working for Saudi Aramco said China’s government was close to playing a key role in any new plan.

Shrouded in secrecy

Doubts among advisers and the country’s highest authorities have grown over listing on an international exchange. Saudi Aramco’s internal operations and finances have been shrouded in secrecy for decades and its close relationship with the state has thrown up numerous financial, legal and regulatory challenges.

The group said: “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.”

The planned listing of a 5 per cent stake in Saudi Aramco is the centrepiece of an economic reform led by Saudi Arabia’s crown prince Mohammed bin Salman, who is keen for a 2018 IPO. He has said the company could be worth $2 trillion.

– Copyright The Financial Times Limited 2017