Saudi Arabia’s energy minister said the country remains committed to the initial public offering (IPO) of state oil giant Saudi Aramco but at a future unspecified date, following media reports the plans has been scraped.
“The government remains committed to the IPO of Saudi Aramco at a time of its own choosing when conditions are optimum,” Khalid Al Falih, Minister of Energy, Industry and Mineral Resources and Chairman of Saudi Aramco said in a statement on the state Saudi Press Agency.
Reuters reported last week that both the international and domestic legs of the IPO had been postponed indefinitely, citing industry sources, and financial advisors have been disbanded.
Falih said speculation of the IPO cancellation is not true but did not disclose a new date for the IPO, which has seen delays of over a year.
“The timing of the IPO will depend on multiple factors, including favourable market conditions, and a downstream acquisition which the company will pursue in the next few months, as directed by its board of director,” he said.
Falih said the government has undertaken a number of major preparatory measures for the listing including issuing a new income tax law as it relates to hydrocarbons activities; reissuing a long-term exclusive concession; and appointing a new board of directors.
The company, for its part, has completed its internal program for IPO preparedness. Specifically, it has amended its bylaws; converted to a joint stock company; ensured that its internal segmental financial reporting aligns with potential listing venue requirements; established an investor relations function; and undertaken the first independent certification of its hydrocarbon reserves, all confirming the company’s peerless status in the industry, the statement on SPA said.
“This is all positive progress on what is a complex process, preparing the company and the Kingdom for what will ultimately be a global landmark market offering of unprecedented quality and scale,” Falih said.
The IPO of 5 percent of Saudi Aramco was considered a cornerstone of the Crown Prince Mohammed bin Salman’s plan to diversify the kingdom’s economy beyond oil by raising $100 billion for investment in other sectors.