Saudi Aramco IPO could be pushed back to 2019

Saudi Arabia is reportedly preparing contingency plans for a possible delay to the biggest IPO in history, the listing of state oil giant Saudi Aramco.

Bloomberg cited sources as confirming the government was still aiming for an initial public offering in the second half of 2018 but due to the tight timetable it could be pushed back into 2019.

Aramco told the publication the IPO “remains on track” and the process was “well underway”, echoing assurances to investors on September 9 after it was reported the kingdom was scaling back its reform efforts.

Read: Saudi says it is accelerating economic reforms, Aramco IPO on track

However, several major decisions have yet to be taken that could limit the ability for the company to sell shares before the end of next year, according to the publication.

These include the location for a secondary listing outside of Saudi Arabia’s Tadawul stock exchange, with an announcement of the winner between London and New York expected to be made in October.

Analysts have also speculated that weaker oil prices at present could see Aramco valued at less than the government’s $2 trillion estimate.

Should the $2 trillion valuation be achieved the planned 5 per cent stake sale would raise around $100bn.

Last week, the Financial Times cited a document as confirming the Saudi government was pushing back many of the objectives of its 2020 reform plan amid concerns the pace of change was hurting the economy.

Read: Saudi to scale back reform plan

The IMF lowered its 2017 growth forecast for the Saudi economy to “close to zero” in July and others have speculated the kingdom could enter recession this year after posting its first GDP decline since 2009 in the first quarter.

Read: IIF forecasts Saudi economy will contract this year