Saudi Aramco has reportedly postponed the planned initial public offering (IPO) of its energy-trading unit, Aramco Trading Company (ATC), due to challenging market conditions, according to sources.
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The state-run oil giant has slowed down preparations for the IPO and has not set a new timeline for the listing, which may be delayed until 2024 if market conditions do not improve.
Initially, Aramco had planned to list ATC on the Riyadh stock exchange in late 2022 or early 2023 with a valuation exceeding $30bn.
The company is also focusing on completing the integration of its main trading unit with the trading arm of its US refining business, Motiva, before proceeding with the IPO.
Saudi Aramco, the state-controlled oil giant, has reportedly postponed the planned initial public offering (IPO) of its energy-trading unit, Aramco Trading Company (ATC).
The IPO, which was expected to be one of the largest share sales in the world this year, has been delayed due to challenging market conditions.
ATC serves as the trading arm of Saudi Aramco, a leading integrated energy and chemical company known for its substantial volume of petroleum products, crude oil, LPG, LNG, and aromatics trading.
In recent months, the company has reportedly slowed down the preparations for the IPO. The company has not yet set a new timeline for the IPO, indicating a possible delay until 2024 if market conditions do not improve.
According to reports, Saudi Aramco has reduced the pace of preparation for the Riyadh IPO of ATC in recent months due to the challenging market conditions.
The company had been planning to list the business in late 2022 or early 2023 and was considering seeking a valuation of more than $30 billion.
However, it now feels it could be difficult to list such a large business on the Riyadh bourse at the moment, as the current situation presents challenges for the listing of such a sizeable business.
The company also hopes to take more time to complete the integration of its main trading unit with the trading arm of its US refining business, Motiva Enterprises, before proceeding with the IPO.
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The postponement of the ATC IPO is expected to have a significant impact on the market. Saudi Aramco is one of the largest oil companies in the world, and the postponement of its IPO is likely to create uncertainty among investors and affect the company’s stock price.
The IPO was expected to be one of the largest share sales in the world this year, and the delay could affect the overall sentiment of the IPO market.
The company has not yet set a new timeline for the IPO, indicating a possible delay until 2024 if market conditions do not improve.
However, the talks with the banks, including Goldman Sachs Group, JPMorgan Chase & Co., and Morgan Stanley, are still ongoing, and the specifics of the offering may change.
The company is expected to reschedule the IPO once the market conditions improve, and it completes the integration of its main trading unit with the trading arm of Motiva.
Before proceeding with the IPO, Saudi Aramco was focused on integrating its main trading unit with the trading arm of its US refining business, Motiva.
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This integration was expected to be completed ahead of the IPO. Earlier this year, ATC successfully acquired Motiva and launched Aramco Trading Americas, expanding its presence in the US market.
The acquisition of Motiva is expected to provide a significant boost to ATC’s operations and enhance its competitiveness in the global energy trading market.
Reports indicate that Saudi Aramco is considering exporting liquefied natural gas (LNG) instead of blue hydrogen. Aramco CEO Amin Nasser said the company will only invest in hydrogen export facilities if the supply agreements are signed.
The company has expressed its intent to invest in hydrogen export facilities only if supply agreements are signed.
The shift to LNG exports could be a response to the challenges posed by the current market conditions, and the company’s focus on ensuring a secure supply of energy to its customers.
Reports indicate that Saudi Aramco engaged with banks such as Goldman Sachs Group, JPMorgan Chase, and Morgan Stanley to explore the possibility of the IPO. Deliberations are ongoing, and details of the offering could change.
Aramco had been planning to seek a valuation of more than $30 billion for ATC. The company now feels it could be difficult to list such a large business on the Riyadh bourse at the moment.
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