Saudi Arabia Calls Off Aramco IPO, Disbands Advisors

Two years ago, when the Aramco IPO was first floated, bankers on Wall Street declared a week-long fee orgy: after all, the $1+ trillion IPO – the biggest in history – was going to result in an underwriting fee bonanza. However, it was not meant to be, and last October the first reports emerged that the IPO would likely not happen over Saudi concerns over financial transparency, venue of the listing, and how much information investors would demand from Saudi Arabia about its oil deposits.

Then, two months after the FT reported that the Aramco IPO “almost certainly wouldn’t happen”, moments ago Reuters’ sources confirmed  that Saudi Arabia has called off both the domestic and international stock listing of state oil giant Aramco.

The financial advisors working on the proposed listing have also been disbanded, as Saudi Arabia shifts its attention to a proposed acquisition of a “strategic stake” in local petrochemicals maker Saudi Basic Industries as we reported one month ago.

“The decision to call off the IPO was taken some time ago, but no-one can disclose this, so statements are gradually going that way – first delay then calling off”, a Saudi source familiar with IPO plans.

WTI Crude reacted modestly lower on the news.