By October 17, 2017 Read More →

Saudi Aramco IPO investor relations work suspended: Reuters

Saudi Aramco IPO

Investor relations work on the Saudi Aramco IPO has been halted.  A number of cornerstone investors, including sovereign wealth funds in China, Japan, Russia and South Korea, have expressed interest in purchasing a piece of Saudi Aramco. Saudi Aramco photo.

FTI Consulting headed up Saudi Aramco IPO investor relations advisory work

According to a report by Reuters, investor relations advisory work by FTI Consulting on the proposed $100 billion Saudi Aramco IPO has been suspended.

The move comes just days after a consortium made up of state-owned oil firms, banks and its sovereign wealth fund China offered to buy up to 5 per cent of Saudi Aramco directly.

“The Chinese want to secure oil supplies,” one of the industry sources told Reuters. “They are willing to take the whole 5 percent, or even more, alone.”

Follow Teo on LinkedIn and Facebook.

Reuters sources say the sale to China could be reciprocal with China investing in Saudi Aramco and, in turn, the company would invest in Chinese refineries.

A decision on China’s offer has not yet been made, but the sale could give the state-owned oil company more flexibility in offering the firm on the stock market.

Reuters reports along with China, there are a number of cornerstone investors offering to purchase a piece of Aramco, including sovereign wealth funds from South Korea and Japan and Russia’s sovereign wealth fund RDIF.

In the report, Reuters says it is not clear why work by FTI was halted, but one source says the decision could broaden the role of Brunswick, the company brought in to do media relations.

Both FTI and Brunswick did not comment on the report and Saudi Aramco did not respond to a request for immediate comment.

The Financial Times reports Saudi officials are concerned about possible legal risks involved with taking the company public.

The FT says Crown Prince Mohammed bin Salman was leaning towards listing Aramco in New York, due to a political alliance with the United States. However, such a listing could open up Saudi Aramco to legal action resulting from Saudi Arabia’s alleged hand in the 9/11 attacks.

Legislation passed by Congress late last year allows lawsuits from 9/11 victims against the kingdom.

Other Aramco officials were looking for a less risky listing in London, but the Financial Times reports Aramco is likely to face tough legal scrutiny in England as well.





Posted in: News

Comments are closed.