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Saudi Aramco delays the launch of the first public offer



(Bloomberg) – Saudi Aramco abruptly delayed the launch of the world's largest original offering by at least a few weeks, according to people informed of the situation.

The delay will provide the selection of Wall Street banks that advise the Saudi state oil producer's time to incorporate third-quarter results into their pre-IPO assessment, said one person, who asked not to be named and discuss confidentiality overlay. Banks are still struggling to meet the $ 2 trillion valuation the company is seeking, according to the person.

The sudden delay disturbs the carefully choreographed plan to start stock sales on October 20, followed a week later by intense marketing during the country's major investment forum – called Davos in the Desert – and ends with a stock exchange listing in late November. Now it is unlikely that a listing is before December or perhaps January.

Last year, Aramco delayed the IPO after more than two years of preparation when international investors appreciated the $ 2 trillion valuation Crown Prince Mohammed bin Salman had put on the company. [19659005] This time, Saudi Arabia chose a simpler route, and decided to start with a local listing only in Riyadh – ditch plans for a sale in London or New York – and recruit local banks and wealthy families to support the IPO. [19659006Densaudiskeregjeringenhaddevirketfastbestemtpååpressepåmedenakselererttidsplanselvimøtemedpotensiellemotvindsominkluderersvakeoljepriserenavtagendeverdensøkonomiogforrigemånedsangreppåselskapetsstørsteprosessanlegg

While details of the proposed offer has not been made public, said people involved in the transaction earlier this month that about 2% of Aramco can be sold, and collect 40 billion dollars and could easily exceed $ 25 billion collected in 20 14 by Chinese e-commerce giant Alibaba Group Holding Ltd.

Ever since the Crown Prince was first listed on the stock exchange of the nation's most valued assets in early 2016, Aramco's valuation has been contested. Many analysts have said that $ 2 trillion is too much compared to similar listed companies.

Aramco may well be the world's most valuable company, but based on dividends received by investors in Exxon Mobil Corp., the largest US oil company, the valuation would be closer to $ 1.5 trillion.

14. The September attack on their oil plants disrupted production and sent shockwaves through the energy markets, triggering the biggest one-day jump in Brent crude oil prices on record and stoking security concerns. Investors are already demanding a premium to hold the country's debt, downgraded this month by Fitch Ratings Ltd.

While advisers had worked on an intention to announce the floating by October 20, executives had not provided a fixed timeline publicly. Aramco CEO Amin Nasser said last month that the listing would happen "very soon."

The IPO promises to be a fee bonus for the more than two dozen stock sales advisors, with Aramco paying them $ 350 million to $ 450 million, people familiar with the matter said Wednesday.

The delay in launching the IPO was reported earlier by the Financial Times.

(Adds possible new timeline in the third paragraph.)

– With help from Javier Blas and Simon Casey.

To contact the reporters about this story: Will Kennedy in London at wkennedy3@bloomberg.net; Dinesh Nair in London at dnair5@bloomberg.net

To contact the editors responsible for this story: Tina Davis at tinadavis@bloomberg.net, Pratish Narayanan, Carlos Caminada

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