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Saudi Aramco IPO 'to be delayed until December'

An Aramco worker guards the Khurais oil field following the September 14 attack [Getty]

Date of publication: 18 October, 2019

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A report claims the highly anticipated 5 percent sale of the Saudi national oil giant will be further delayed due to the major attack on its facilities last month.

Saudi Arabia’s national oil company Aramco is planning to push back its highly anticipated initial public offering, which was set to launch next week, according to a report by Agence France-Presse (AFP) published on Thursday.

The move could delay stock market trading of the oil giant to December or January instead of November, following the attack on one of its facilities in September that has slashed output, according to AFP’s source.

The company is expected to be valued at between $1.5 and $2 trillion, making the IPO the biggest in history even though it plans to float just 5 percent of its assets.

The offering is part of Riyadh's efforts under Crown Prince Mohammed bin Salman to diversify its economy away from oil, which includes a mass privatisation drive.

Read more: How Saudi Aramco is powering the global climate crisis

Aramco has envisioned a two-stage public listing, with about two percent of the capital trading on the Tadawul exchange in Saudi Arabia and an additional listing on a foreign exchange, sources say. 

The company intends for about five percent of shares to be available on public exchanges.

The prospect of falling short of the $2 trillion valuation desired by Saudi rulers is widely considered the reason the IPO has been delayed.

A prior initiative to list Aramco was pulled last year due to disappointment over the valuation during a weak period for oil prices.

The oil giant has also been at the receiving end of wide condemnation after a Guardian report showed it to be the number one carbon emitting company in the world.

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Environmental groups issued a letter to banks involved in Aramco's partial privatisation, criticising their involvement in the "biggest single infusion of capital into the fossil fuel industry" since the 2015 Paris Agreement on climate change, the Guardian reported on Thursday. 

Those involved in Aramco's gigantic public offering are Bank of America, Citigroup, Credit Suisse, Goldman Sachs, HSBC, JP Morgan and Morgan Stanley.

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