INSUBCONTINENT EXCLUSIVE:
The prince announced the plan to sell about 5% of Aramco in 2016 via a local and an international listingLondon/Riyadh: Saudi Arabia has
called off both the domestic and international stock listing of state oil giant Aramco, billed as the biggest such deal in history, four
senior industry sources said on Wednesday
The financial advisors working on the proposed listing have been disbanded, as Saudi Arabia shifts its attention to a proposed acquisition
of a "strategic stake" in local petrochemicals maker Saudi Basic Industries Corp 2010.SE, two of the sources said."The decision to call off
the IPO was taken some time ago, but no-one can disclose this, so statements are gradually going that way - first delay then calling off," a
Saudi source familiar with the IPO plans said.Saudi Arabia's energy minister denied that Aramco's initial public offering would be
called off, in a statement issued early on Thursday."The government remains committed to the initial public offering of Saudi Aramco, in
statement.He said Riyadh had taken measures to prepare for the listing and that the timing would depend on factors including favorable
market conditions, and a planned downstream acquisition in the next few months.The proposed listing of the national champion was a central
part of Crown Prince Mohammed bin Salman's reform drive aimed at restructuring the kingdom's economy and reducing its dependence on oil
revenue.The prince announced the plan to sell about 5 per cent of Aramco in 2016 via a local and an international listing, predicting the
sale would value the whole company at $2 trillion or more
Several industry experts, however, questioned whether a valuation that high was realistic, which hindered the process of preparing the IPO
for the advisors.Stock exchanges in financial centres including London, New York and Hong Kong have been vying to host the international
tranche of the share sale.An army of bankers and lawyers started to fiercely compete to win advisory roles in the IPO, seen as a gateway to
a host of other deals they expected to flow from the kingdom's wide privatisation programme.International banks JPMorgan, Morgan Stanley
and HSBC, were working as global coordinators, boutique investment banks Moelis Co and Evercore were chosen as independent advisors and law
firm White Case as legal adviser, sources had previously told Reuters.More banks were expected to be named but no bookrunners were formally
appointed despite banks pitching for the deal.Lawyers, bankers and auditors are all essential in the drafting the prospectus, a formal
document that provides essential details on the company."The message we have been given is that the IPO has been called off for the
foreseeable future," said one of the sources, a senior financial advisor."Even the local float on the Tadawul Stock Exchange has been
shelved," the source added.Al Falih said in the company's 2017 annual report, released in August, that Aramco "continued to prepare itself
for the listing of its shares, a landmark event the company and its board anticipate with excitement."Aramco had a budget which it used to
pay advisors until the end of June
This has not been renewed, one of sources said."The advisors have been put on standby," a third source, a senior oil industry official,
said."The IPO has not been officially called off, but the likelihood of it not happening at all is greater than it being on."Sources have
previously told Reuters that in addition to the valuations, disagreements among Saudi officials and their advisers over which international
listing venue to be chosen had slowed down the IPO preparations.
