Saudis Prepare for Possible Aramco IPO Delay to 2019

Traders Magazine Online News, October 2, 2017

John D'Antona Jr.

Big things often take time to cultivate and pull together – and initial public offerings are no exception.

Especially when one is talking about the largest single IPO is history – the Saudi Aramco offering which might be delayed, according to a report from Bloomberg. It reported that the Kingdom is preparing contingency plans for a possible delay to the IPO of the state-owned oil company by a few months into 2019, according to people familiar with the matter.

That is not say that a delay from the original 2018 date is certain as the government is still aiming for an IPO next year. But sources told Bloomberg that 2018 could prove a challenge given the complexities of the global offering and its enormous size.

In aa statement, Saudi Aramco said the IPO "remains on track. The IPO process is well underway and Saudi Aramco remains focused on ensuring that all IPO related work is completed to the very highest standards on time.” However, no specific time was mentioned.

Bloomberg added that Saudi Arabia has yet to announce where it will sell shares in Aramco other than the domestic stock exchange in Riyadh. US exchanges have been reportedly jockeying for position to get in on the deal, as well as US domiciled brokers.  The country may not to make an announcement until late October, when it’s holding a big investment conference in Riyadh. The delay in selecting a foreign exchange, mostly likely London or New York, has had a knock-on effect on other preparatory work.

Saudi Aramco has hired JPMorgan Chase & Co., Morgan Stanley, HSBC Bank Plc, Moelis & Co. and Evercore Partners Inc. to advise on the IPO. Independent Wall Street consultant Michael Klein is advising the oil ministry.

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