The much-touted initial public offering (IPO) of Saudi Arabia's giant state-owned oil company Aramco has stalled and, according to government officials and people familiar with the matter, will probably never take place, The Wall Street Journal said Thursday.
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Up until now the only questions had been which exchange would host the Aramco IPO and how the threat of more litigation from the families of 9/11 victims would affect the IPO, which -- if it happened -- would be the world's largest IPO.
It also was to be a strategic part of the kingdom's bid to become less reliant on oil, the Journal said.
Officials with Aramco, which is short for Saudi Arabian Oil Co., the country's energy ministry or government did not immediately respond to request for comment.
The decision rests with Prince Mohammed, the son of King Salman and the member of the royal family who runs the kingdom's day-to-day affairs, the Journal said.
Word of the fresh doubts about the IPO, which Saudi officials would have resulted in a $2 trillion valuation for the company, marks a sharp contrast to earlier optimism.
“Saudi Aramco will go public. That’s for sure. It will go public in the local market. We have not decided yet where we are going to list. If we are going with a duel listing whether that is in New York, London, Hong Kong or another place,” said Mohammed Al-Jadaan, Saudi Arabia’s finance minister, during an interview on FOX Business’ “Mornings with Maria" in March.
When asked about the threat of more litigation from 9/11 families, who allege that the country was involved in funneling money to terrorist group al-Qaeda to carry out the attacks that killed more than 3,000 people on U.S. soil, Al-Jadaan said the country is focused on the deal.
“I won’t comment on specifics but we are trying to examine all options and carry detailed due diligence … this is the largest company in the world, it means a lot for our country, it is more than half of our GDP so we want to be careful,” he said.
Jim Kreindler of Kreindler and Kreindler, one of the law firms representing 9/11 families, tells FOX Business that while the Aramco IPO is relevant, he doesn’t need it to win for his clients. On Wednesday, a U.S. Judge in New York rejected a motion by the Saudis to dismiss the case, clearing the path for the 9/11 victims to move forward.
“Whether the Aramco IPO goes forward in New York or London, it does not affect our ability to recover significant damages,” said Kreindler, adding, “We want fair and just compensation and we are looking for a very significant recovery in the case which we expect to win.”
Investors will get a chance to learn more about the IPO this week as Saudi Crown Prince Mohammed bin Salman makes the rounds in New York City, participating in the Saudi US-CEO Forum in New York, as well as additional investor meetings.
Aramco, whose value has been estimated close to $2 trillion, would be a cash cow for any global exchange and a big listings win.
“We’ll compete for any global IPO for a great business,” said Tom Farley, president of the New York Stock Exchange, an arm of Intercontinental Exchange, during an interview with FOX Business last October from Saudi Arabia.