Daily Management Review

Drone Attacks Not To Deter Saudi Aramco To Push For Its IPO Launch


Despite the devastating drone attack on its largest oil facilities cutting down the output of Saudi oil giant Saudi Aramco by almost half, the company is pushing ahead with its planned initial public offering that will set a record in the IPO world, according to reports. Quoting sources with knowledge of the matter, the reports stated that the bankers who had been hired by the Saudi oil giant to present the deal to analysts and prospective investors is being carried out.
Reports however claimed that the energy giant has not confirmed to its executives any delay in its planned IPO which is slated to be launched as early as November this year and the company is also aiming to organize analyst presentations as had been planned as part of the IPO launch.
According to an earlier report by Bloomberg News, Aramco had planned to organize presentations to analysts during the week of September 22.
But the most recent reports also suggest that despite the intentions of the company, it is unlikely that the planned launch of the IPO in the coming months would actually take place when considering the massive nature of the drone attacks, responsibility for which has been claimed by Yemen's Iran-backed Houthi rebels.
According to the sources in the reports, the time taken by Aramco to get back to full capacity would determine the delay in the launch of the IPO. The attack wiped out about 5.7 million barrels per day of production for the company.
No comments from Saudi Aramco could be found on the issue.
Before the drone attacks on Aramco’s facilities on Saturday, the company had been aggresivekly pushing ahead with the preparations for the IPO and had hired banks including Goldman Sachs Group Inc and Morgan Stanley just days before the attack took place.
According to analysis, the possible valuation of Saudi Aramco was at over $2 trillion according to Saudi Crown Prince Mohammed bin Salman and claim that the latest attack on the largest crude-processing facility and the second-biggest oil field of the country could reduce the valuation for the company.
"There's a 70 per cent plus chance of delay of the Aramco IPO if they want a higher valuation," said Mohammed Ali Yasin, the chief strategy officer at Al Dhabi Capital in Abu Dhabi. "The cost of risk that investors were factoring in on Aramco prior to this attack completely needs to change going forward."
The oil installations in Saudi Arabia are still among their targets, said Houthi rebels on Monday and the group said that anywhere in Saudi Arabia can be targeted by its weapons.
Following the strikes that wiped out about 5 per cent of the global supply of oil, the global crude prices surged by the highest on record to more than $71 a barrel. While industry experts claimed that large volumes of oil; can be restored back into the global oil supply channel within days, they also warned that restoring full production capacity could take weeks.