Saudi Arabia scrubs Aramco mega-IPO
Saudi Arabia is aborting a planned initial public offering of shares in Aramco both in the U.S. and aboard, according to two sources familiar with the decision. The listing was expected to be the biggest IPO in history.
The move to scrap the offering was first reported by Reuters, which cited four senior industry sources.
Rising crude prices in recent years have bolstered Saudi Arabia's oil revenue, lessening the need to take Aramco public, sources told CBS News. Saudi officials also had qualms about the disclosure requirements for an IPO. One source said a private placement with China might be considered.
The proposed IPO was seen as a key piece of Crown Prince Mohammed bin Salman's effort to restructure the kingdom's economy and lessen its reliance on oil revenue. He unveiled the plan to sell roughly 5 percent of Aramco in 2016 through a local and international listing, estimating the IPO would value the company at $2 trillion or more.
But some industry experts wondered whether such a lofty valuation was pragmatic, which hurt the IPO preparation effort, Reuters said.
Stock exchanges in New York, Hong Kong and London were among those jockeying to host the listing.
Both Saudi Aramco and the Saudi Royal Court declined to comment, according to the report.
-- With reporting from CBS News' Kylie Atwood.
