Saudi Aramco may postpone public offering due to 'market conditions'

Saudi Aramco abruptly postponed the launch of the world’s largest initial public offering by at least a few weeks, according to people briefed on the situation.

The state-owned oil giant said in a statement that the timing of the IPO will depend on market conditions and that it continues to engage with shareholders on activities related to the listing.

The delay will give the array of Wall Street banks advising the Saudi state oil producer time to incorporate third-quarter results into their pre-IPO assessment valuations, said one of the people, who asked not to be named discussing confidential deliberations. The banks are still struggling to meet the $2 trillion valuation the company is seeking, according to the person.

The sudden delay disrupts the carefully choreographed plan to launch the share sale on Oct. 20, followed a week later by intense promotion during the country’s big investment forum — dubbed Davos in the Desert — and ending with an IPO in late November. Now, a listing is unlikely before December or perhaps January.

Last year, Aramco delayed the IPO after more than two years of preparations as international investors balked at the $2 trillion valuation Crown Prince Mohammed bin Salman had put on the company.

This time Saudi Arabia opted for an easier route, deciding to start with a local listing only in Riyadh — ditching plans for a sale in London or New York — and enlisting local banks and wealthy families to support the IPO.

The Saudi government had seemed determined to press on with an accelerated schedule even in the face of potential headwinds that include weak oil prices, a slowing world economy and last month’s attack on the company’s biggest processing plant.

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