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Why did Aramco Delay IPO again ? It's Not Always What It Seems.

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(edited)

Saudi Aramco hired TWO DOZEN of the World's most prestigious Investment Banks.  They're going to pay them a reported FOUR HUNDRED FIFTY MILLION in fees.

. . . . and now unnamed bankers involved say delayed again ? Bankers that do not want to be named say the Corporate excuse is they want investors to see the quarterly results coming the second week of November first.   

They say the real reason is even with two dozen Investment Banks and 450 million dollars in fees for the taking, Aramco can't find a banker to sign off on the 2 Trillion dollar valuation.

Reportedly Saudi leaders feel it would be yet one more embarrassment to Saudi's MBS to go public at a lower valuation or undersubscribed  just before the Saudi Showcase International Investment Conference FII2019 starting October 29th.  

Also, can Aramco go public with Brent in the 50's ? We usually see oil price moved up as we approach contract settlement date at the end of the month. It's like clockwork.

Postponing the IPO till after the OPEC meeting December 4th will give OPEC+ will allow them to make major cuts (or at least announce major cuts. They never comply).  Then expect another "Middle East incident" so the Investment Banks can again go out and tell the world there should be a greater "risk premium" in oil prices.

The Investment Banks are Perplexed

It's reported the banks felt they put enough time between the Kashoggi murder to now move ahead with IPO. Are banks afraid of possible repercusions of signing off on 2 Trillion dollar valuation?  

Hey, the NBA and Labron understand who butters their buns.  Wallstreet has never seemed to care about such matters. Why is it different this time.

$$$$ the new religion.

It might be because if they push a valuation it does not deserve because that's what MBS said it had to be the Saudis are not sued, the banks have Fuduciary Responsibility to their clients. They get sued.

Maybe the banks wanted to include on the Prospectus that (1) Aramco does not own the reserves, the Kingdom does. (2) Aramco CEO stated "the government tells us how much oil to produce". (3) Aramco dividends and special payouts account for approx 80% of national budget (4) dividend could change (5) discuss geopolitical risk. (6) future of fossil fuel and oil price. (7) use what oil price in pro forma financial statements model (8) Risk of repeat of Palace Coup (April 2018) only successful this time. New government could just say "No more public Company" , say Bye to U.S. , Hello to Putin.

It's not always what it seems in the Middle East.  I know.  

Does Saudi Arabia need IPO FUNDS to change ?

or

Should Saudi Arabia change first before they expect investment in their country.

Edited by Jabbar
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9 hours ago, Jabbar said:

Saudi Aramco hired TWO DOZEN of the World's most prestigious Investment Banks.  They're going to pay them a reported FOUR HUNDRED FIFTY MILLION in fees.

KSA is well on it's way to spending more on fees the 5% of the $2 trillion can't happen will deliver.

This may go down as the world's most expensive saving of face. Bring on the world's finest suit of invisible threads.

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1 hour ago, John Foote said:

KSA is well on it's way to spending more on fees the 5% of the $2 trillion can't happen will deliver.

This may go down as the world's most expensive saving of face. Bring on the world's finest suit of invisible threads.

I saw published going to be around 450 million.  I have to see this.  You think they can get banks go go along with 2 Trillion ?

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Why would ANY banker, with the present environment in the Middle East, sign off on a value of two trillion today when it might go up in smoke next week?

I am not a finance guy, but this would concern me.

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On 10/18/2019 at 8:15 PM, Douglas Buckland said:

Why would ANY banker, with the present environment in the Middle East, sign off on a value of two trillion today when it might go up in smoke next week?

I am not a finance guy, but this would concern me.

There will be plenty signing off. Fraud exists in the financial community. That wonderful risk disclaimer lets them off. 

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