State oil giant Aramco has decided to postpone the launch of its initial public offering, a new failure for Mohammed bin Salman and his 2030 economic vision.
Aramco officials said they “want to do everything in their power to reach the target value… and strong results after the attack will put them in a stronger position,” referring to the attack on two oil facilities in the Kingdom on September 14.
Aramco was expected to officially announce next week its plan to launch its IPO, which is likely to raise $ 20 billion.
Aramco’s Abqaiq and Khurais oil facilities have been targeted by drones and missiles on their infrastructure, resulting in a brief shutdown of more than half of the company’s oil production.
The attack caused a huge loss to the Kingdom’s economy, amounting to about 5.7 million barrels per day of production, where the Yemeni Houthi group claimed responsibility for the attack, while Riyadh and Washington accused Iran of launching, which Tehran denied as without evidence.
Aramco’s listing on the exchange was considered the biggest operation of its kind in the global economy, with the company’s value ranging from $ 1.5 trillion to $ 2 trillion, in what is reported to be overvalued.
In September, informed sources reported that the Saudi authorities were considering the possibility of delaying the IPO of Aramco after the attack on its oil facilities and caused the suspension of pumping more than half of its production.
Aramco’s IPO is part of Crown Prince Mohammed bin Salman’s plan to diversify the Kingdom’s economy away from oil.
The company plans to offer 5% of its shares in the IPO, but the process has been repeatedly delayed due to several reasons, including low oil prices, according to economic observers.
On October 7, Fitch downgraded Aramco’s credit rating from A+ to A.
“The downgrade took into account the growing geopolitical tensions in the region, as well as the country’s continuing budget deficit, among other factors,” Fitch (New York-based) said in a statement.
At the end of September, Fitch downgraded the Kingdom’s rating to “A” from “A +” with a stable outlook.
Fitch has previously estimated that the attack would have a very limited impact on Saudi Aramco’s financial and operating performance in 2019.