Saudi Arabia has insisted that it remains committed to an initial public offering of national oil company Saudi Aramco, but said the listing would go ahead “at a time of its own choosing, when conditions are optimum”. The government statement follows months of signs that the kingdom was unwilling or unable to forge ahead with a planned flotation — which could be the largest ever — and a Reuters report saying both the proposed domestic and international stock listings had been called off, with IPO advisers disbanded. Khalid Al Falih, the Saudi energy minister, issued the statement early on Thursday dismissing “speculation surrounding the cancellation of the IPO as not true”.
People close to the kingdom had already told the Financial Times in recent weeks Riyadh had postponed the privatisation indefinitely, after months of delays, with Saudi Arabia seeking alternative ways to boost the finances of the sovereign wealth fund, which was due to receive the proceeds of the IPO. The Royal Court instructed Saudi Aramco to acquire the Public Investment Fund’s 70 per cent stake in Saudi petrochemicals maker Sabic, which could raise $70bn for the fund by moving money from one state coffer to another, three people familiar with the matter said.
To pay for the stake, Saudi Aramco is looking to raise tens of billions of dollars from international banks, which some advisers have said is an alternative to an IPO that achieves much of the same objectives. People working closely on the deal told the FT that while the planned listing had indeed been put on ice, advisers had not been officially called off, with some bankers diverted to the Sabic project. Mr Falih said that while the government was still committed to the sale, its timing would depend on multiple factors, including “favourable market conditions” and Saudi Aramco’s planned acquisition of a stake in Sabic. Mr Falih added that to prepare for the listing, the Saudi government had “undertaken a number of major preparatory measures”, including a new oil and gas tax law, reissuing Saudi Aramco’s long-term exclusive concession for the country’s resources, and appointing a new board of directors. Those measures would “safeguard its interests and those of the company’s future private shareholders”, Mr Falih said.