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Saudi Arabia’s state-owned oil corporation has scaled back preparations for its public listing by scrapping plans to market shares in the company to investors outside the Middle East.
Saudi Aramco has reportedly ruled out a formal investor roadshow across Asia, the US and Europe just weeks ahead of a planned initial public offering on Riyadh’s Tadawul stock exchange.
Aramco’s executives were expected to meet with major institutional investors across the world’s financial centres over the coming weeks to promote the world’s most profitable company in the run-up to its listing early next month.
The decision to focus on investors in the Saudi Arabia and the Gulf region is the latest blow to Aramco’s long-awaited market debut, which was once expected to be the largest in history.
Aramco hoped to raise more than $30bn (£27bn) for the government by selling a stake in its vast oil wealth to help modernise the Saudi economy and gain a foothold in the international investment community.
Interest from global investors has cooled in recent months because of concerns over the company’s ties to the Saudi state and its position at the centre of flaring conflicts in the Gulf region.
Major international investors have expressed scepticism over the $2tn valuation set by Crown Prince Mohammed bin Salman, instead estimating its value at between $1.2tn and $1.5tn, according to a poll by Bloomberg.
International banks have also come under fire from green groups for undermining global efforts to tackle the climate crisis by supporting the listing of the world’s biggest oil producer.
The latest IPO plans, released on Sunday, confirmed that it would sell up to 1.5% of the company at between 30 and 32 riyal a share, which would value it at between $1.6tn and $1.7tn.
At this price the IPO would raise raise $24bn-$25.6bn to help reform the Saudi economy, on a par with the record $25bn raised by the Chinese online retailer Alibaba in 2014.
Aramco has reserved about 0.5% for Saudi retail investors, who have been promised tax cuts and a $75bn-a-year minimum dividend. Two-thirds of the shares are expected to be snapped up by institutional investors in the Middle East, with some support from investors in China and Russia.
The shares are due to begin trading on the Tadawul market on 5 December.
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