Saudi Arabia's national petroleum and natural gas company, Aramco, is reportedly now restarting its efforts for its long-delayed initial public offering. The move comes after months of placing the planned IPO on hold, mainly due to the company's recent purchase of a stake in local chemical giant Saudi Basic Industries.
According to reports citing sources close to the matter, Aramco is apparently now holding meetings with a number of investment banks to discuss its upcoming IPO. The reports also revealed that the work to list the company may eventually lead to it going public sometime at the end of 2019 or early next year.
Plans to have the company listed started more than two years ago, with Aramco formally contacting banks to help it with its IPO in 2016. Plans were then indefinitely put on hold after the company decided to buy a $69 billion stake in Saudi Basic Industries.
Sources revealed that Aramco, officially the Saudi Arabian Oil Company, apparently wants to complete the acquisition first before it focuses on going public.
During its last attempt, Aramco had worked with various big-name investment firms, including HSBC Holdings, JPMorgan Chase, Morgan Stanley, and Evercore. It is not yet clear if the company has contacted the same banks once again in its latest efforts to restart its planned mega IPO.
Saudi previously planned to sell around 5 percent of Aramco's stocks to raise a record $100 billion. This would make Aramco's IPO one of the biggest the world has ever seen, which means that the banks that get to work with the company on its IPO will definitely get a significant share out of the proceeds.
Saudi Arabia is aiming to generate an ambitious $2 trillion market valuation with the planned IPO. This may be difficult to achieve for the world's most profitable oil company given the recent development in the global oil industry.
Lower oil prices and growing environmental concerns may hamper the demand for the company's shares once it goes public. There is also the added concern regarding the ongoing tensions in the region and the rising tensions between the US and Iran.
Saudi's Crown Prince Mohammed bin Salman had previously announced his intention of having the country's oil firm listing on the New York Stock Exchange. However, advisers have warned that listing in the US could open the company up to scrutiny and litigation. Prince Mohammed previously stated that he intends to have the company listed sometime in 2020 or 2021.
