Saudi Aramco signaled another potential delay for the world’s largest initial public offering after it started talks this week to buy a stake in a local petro-chemical company.
The state-owned oil company said it may buy a strategic stake in Saudi Basic Industries Corp. from the country’s sovereign wealth fund. Sabic, as the chemical company is known, carries a market value of little more than $100 billion and the sovereign wealth fund controls a 70 percent stake.
Amin Nasser, Aramco’s chief executive officer, said in an interview that the company is still in the early stages of talks and a deal isn’t certain. “A potential Sabic deal would affect the time frame for Saudi Aramco’s initial public offering,” Nasser told Arabiya television in an interview airing Friday.
A stake in a chemical company like Sabic makes Aramco less vulnerable to volatile oil prices, and would be positive for its revenue, Nasser told Arabiya
The remarks raise the chances of further delay for an IPO that could raise as much as $100 billion. Saudi Energy Minister Khalid al-Falih said last month that while “it would be nice if we can do it in 2019, there is a lot more at stake than just ticking a box and say, ‘We got this out of the way.”’