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Wednesday, June 20, 2018

Aramco international listing looks increasingly difficult

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Saudi Arabia is increasingly looking to just float oil giant Saudi Aramco locally as plans for an initial public offering (IPO) on an international exchange such as London or New York hang in the balance, sources close to the process said.

The kingdom is counting on being awarded emerging market status by index complier MSCI in June to help Saudi Aramco attract Western funds, in addition to cornerstone investors from China, Japan and South Korea, the sources said.

"I would guess it is about evens that there will be no international IPO," said a high-level source familiar with the preparations, saying they were proving to be a disappointment. Saudi Arabia is planning to list up to 5 percent of Saudi Aramco in an initial public offering that could value it at up to $2 trillion and make it the world's biggest oil company by market capitalization.

Saudi Energy Minister Khalid al-Falih said last week that Aramco was too important to risk listing in the United States because of litigation concerns, such as existing lawsuits against rival oil companies for their role in climate change.

British officials have been told by Saudi counterparts London has a chance to secure the listing but only in 2019 at the earliest, according to the Financial Times, and sources told Reuters the kingdom was now focusing on a listing on the local exchange, or Tadawul. "The only thing we know today is that Tadawul will be the key listing location as our national exchange," Falih told CNN.

"We are waiting for the reforms to be in place and to join MSCI and Aramco listing in Tadawul will be catalytic for that capital market as we bring international capital to the kingdom," he told the U.S. channel last week.

-Reuters, Dubai

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