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Thursday, 18 May 2017

Saudi Aramco's Only IPO Foray Provides a Cautionary Tale - Bloomberg

Saudi Aramco's Only IPO Foray Provides a Cautionary Tale - Bloomberg:

"The refinery two hours by car north of Mecca is easily overlooked in the Saudi Aramco colossus. But it offers a bonus: a window into one of the world’s most secretive businesses. Since the Saudi state-owned oil giant sold shares in Rabigh Refining and Petrochemical Co. in 2008, the facility has provided a peek into a small corner of its operations. With few other clues available as Saudi Arabia prepares a massive initial public offering of as much as 5 percent of Aramco for next year, investors are scrutinizing the refinery for insights into the parent company itself. The picture at PetroRabigh isn’t promising: a falling share price, mounting losses and troubled operations. Perhaps more importantly, the plant’s struggles pierce a key narrative that Aramco has built about itself: best-in-class installations, engineering prowess and superior employees. Yet for all the challenges at PetroRabigh, investors are likely to take them in stride."

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