Saudi Arabia shocked global capital markets by announcing scrapping of its plan to float state-owned energy giant Aramco through an IPO, which the world was keenly looking forward to, media reports said.
The initial public offering was among the initiatives announced by Crown Prince Mohammed bin Salman as part of his ambitious plan to overhaul the Saudi economy. The Saudis had hoped to attract a $2 trillion valuation for Aramco, the world’s largest oil company, though some outside analysts have pegged its value at half that level, Reuters adds.
According to Reuters, doubt has been swirling around the IPO for months as the kingdom deferred making decisions on key parts of the stock market debut, including where to list shares overseas. Skepticism only grew deeper earlier this year when sources familiar with the process said Aramco would first list on its domestic exchange, the Tadawul, and put off an international listing.
Saudi Aramco has dismissed advisers working on the deal and is now focusing on acquiring a stake in Saudi Basic Industries, a domestic petrochemical company, Reuters reported quoting two sources.