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Report: Saudi Aramco may shelve international IPO, weighs private placement

The Saudi Arabian Oil Co., or Aramco, may shelve its planned international public offering and instead pursue a private share sale to major sovereign wealth funds and institutional investors, the Financial Times reported, citing persons familiar with the IPO preparations.

The FT's sources said that talks about a private sale to foreign governments, including China, gained pace in recent weeks. The Chinese government could play an important role in any new plans, according to a person working for Saudi Aramco.

One of the people involved in the talks said some financial advisers to Saudi Aramco are increasingly concerned that the company could abandon the planned international listing.

But another source said that if Saudi Aramco proceeds with the private share sale, an international listing may still follow, though such a move could be delayed until 2019 or later. The source also said that there is no active push to drop the international listing.

Saudi Aramco would also still plan to list shares on the Saudi Stock Exchange (Tadawul) in 2018 if it pursues the private sale, the sources said. A combined private placement and domestic listing would be easier to execute and even increase the company's valuation, according to one of the sources.

The Financial Times noted that it was not clear whether Saudi Arabian Crown Prince Mohammed bin Salman supported the proposed private share sale, adding that the international listing could still happen in 2018 since no final decision has been made.