Saudi Aramco, the state-owned Saudi Arabian oil company that was recently-adjudged the most profitable company in the world, has again delayed its Initial Public Offering (IPO) which was initially scheduled to take place last year, Nairametrics reports.
Quoting Bloomberg, the paper said the latest delay stemmed from investors’ doubt over the company’s $2 trillion valuation. In view of this, a two-week postponement of the IPO “will allow the array of Wall Street bankers advising Aramco to incorporate third-quarter results in their pre-IPO assessments of the company…”
In the meantime, the company said IPO would be dependent on market conditions, even as it continues to engage with shareholders concerning the listing.
Saudi Aramco was declared the most profitable company in the world after it published its financial results for the first time, disclosing that it made $111 billion in profits back last year. While this came as a surprise to many people around the world, it is important to note that Saudi Aramco is single-handedly responsible for pumping 10% of the world’s crude oil output. This should, understandably, accounts for a lot of returns.
Consequently, investors around the world have long been excited about the IPO. However, they have also expressed doubt over the company’s valuation. As a matter of fact, even analysts have expressed their doubts as well, arguing that a $2 trillion valuation for the company is rather an expensive projection. This skepticism has been blamed for all the delays that have faced the IPO ever since it was announced in 2016 by Crown Prince Mohammed bin Salman.
The company is determined to go on with the IPO despite these setbacks, including a major attack on its facility last month. There are indications that 2% of Saudi Aramco will be sold during the IPO, with as much as $40 billion raised.