Saudi Aramco has postponed the launch of the long-awaited public offering, on Sunday said three people familiar with the matter are putting the planned November flotation in jeopardy.
One of these people said the company wanted to wait until it could give investors clarity on the last quarterly revenue following attacks on Saudi infrastructure last month that temporarily halved production.
The listing, which is central to Crown Prince Mohammed bin Salman's ambitious economic reform plans, has been delayed and doubts whether it could achieve a valuation of $ 2tn desired by the kingdom's heir.
The government expected to sign off on a national listing for Saudi Aramco this week. A board meeting was to follow before the company announced its formal intention to float on October 20 in Dhahran where the company is headquartered.
The person said the results would show that Saudi Aramco ̵
Another person briefed on the case said the announcement had been "delayed but not withdrawn", while a third person said it had been delayed by "weeks".
Saudi Aramco is expected to issue the IPO prospect next week ahead of a listing of up to 3 percent of the company as early as November.
Despite local bankers pointing to enthusiasm among retail investors in Saudi Arabia for the listing, it is unclear whether Prince Mohammed will be able to secure its long-sought-after $ 2 tn valuation from potential foreign investors.
There are major concerns about perceived state interference in Saudi Aramco's business strategy along with a greater concern about the kingdom's ability to protect Saudi energy values.
Large trading families – many of whom were drawn in the corruption crackdown in 2017 – are also being pressured to invest to ensure the success of the IPO.
During global investor meetings with fund managers in Asia and the United States in recent weeks, Saudi Aramco received a lenient response to the proposal, bankers said of the talks that were said.
A banker said Saudi Aramco had sought $ 1 billion from institutions for an anchor investment stake for a deal that would float 1 to 2 percent of the company at a valuation of $ 1.5tn- $ 2tn.
"Institutions are not interested in valuations higher than $ 1.2tn," the banker said.
Sovereign wealth funds in the Middle East have also been tapped for the potential launch. While some are concerned about valuation, they also admit that political imperatives to support the kingdom may trump any skeptical view of the company's investment case. "This call to look at Aramco came from higher figures," said another financier who briefed on the discussions.
Saudi banks are also expected to lend a lot of loans to Saudi investors so that they can finance their stock purchases. The banks also create funds that retail shareholders can buy into the offer to generate a bumper response.
In recent weeks, Riyadh has stepped up its efforts to support a higher valuation for the company. Riyadh announced an annual dividend of $ 75 billion, changed state royalty payments and waived long-term investment plans.
Saudi Aramco did not immediately respond to a request for comment.