Saudi Crown Prince Mohammed bin Salman. Picture: REUTERS
Saudi Crown Prince Mohammed bin Salman. Picture: REUTERS

Riyadh/London — Saudi Arabia’s crown prince maintains the stalled plan to sell shares in oil giant Aramco will go ahead, promising an initial public offering by 2021 and sticking to his ambitious view that the state-run company is worth $2-trillion or more.

The comments show 33-year-old Mohammed bin Salman’s determination to press ahead with the IPO even after Riyadh’s original timetable was undone by scepticism about the company’s valuation and a plan for Aramco to buy a controlling stake in the country’s biggest chemical producer.

"I believe late 2020, early 2021," he said, discussing the timing of the IPO in an interview at the royal palace in Riyadh.

"The investor will decide the price on the day. I believe it will be above $2-trillion because it will be huge."

The IPO project was first announced in 2016 as the cornerstone of the prince’s Vision 2030 plan to modernise the Saudi economy. Officials said repeatedly the deal was "on track on time" for the second half of 2018, but said earlier this year it would be delayed into 2019. Soon after, Aramco put the IPO on hold and instead started talks to buy a majority stake in local petrochemical giant Sabic, a deal potentially worth $70bn.

Late on Wednesday, surrounded by advisers, Prince Mohammed said the IPO was "100%" in the nation’s interest.

"Everyone heard rumours of Saudi Arabia cancelling the IPO of Aramco, delaying that, and that this is delaying Vision 2030," he said. "This is not right."

Prince Mohammed said the IPO’s delay had its origin in mid-2017, when it became clear that Aramco needed a push into petrochemicals. He said it would have been unfair to go ahead with the listing only to surprise investors soon after with a big deal in chemicals.

The Aramco IPO would be a seismic event for financial markets. Prince Mohammed said he hoped to raise a record $100bn selling a 5% stake.

Bloomberg