Saudi Aramco cancels European roadshow ahead of long-awaited IPO

Saudi Aramco will not formally market its shares outside of the Gulf after cancelling plans for a European roadshow ahead of its long-awaited initial public offering (IPO).

The postponement of the European roadshow, reported by the Financial Times, comes a day after the Saudi oil behemoth similarly decided to cancel its investor meetings scheduled in the US and Asia.

With meetings now only scheduled in its home market and in fellow Gulf states the United Arab Emirates, Bahrain, Kuwait and Oman, the success of Aramco’s IPO will now depend on local demand.

Up to 0.5% of the company’s shares will be reserved for Saudi nationals, who will also get access to a bonus share scheme as long as they maintain their stock for a fixed period.

The world’s largest oil producer released the official price range for the sale on Sunday, which would value the company at US$1.7 trillion. Aramco said it would sell 1.5% of the company’s shares on Riyadh’s Tadawul exchange at a price of 30 to 32 riyals.

A sale at the top end of this range would give Aramco the largest IPO of all time at $25.6 billion, just surpassing the $25 billion raised by Chinese retailer Alibaba in its debut in New York in 2014.

However, this would fall well below Crown Prince Mohammed bin Salman’s initial plans, which would have seen the company raise nearly $100 billion via the sale of 5% of its shares.

The Aramco IPO forms a central part of the Kingdom’s plans to diversify the economy away from oil.

@RGNonline