Saudi Aramco’s record-shattering IPO is on the horizon. Here are 6 of the biggest risks the company sees moving forward.
as it looked to give investors more detail around how the attack harmed revenues, and the conglomerate cited additional attacks as a key risk moving forward.
The oil conglomerate also noted that the mix of domestic and international climate policies such as the Paris Agreement establish several different paces for the development of green-energy laws. Any significant shift away from hydrocarbon-based fuels could force Aramco"to incur costs or invest additional capital," according to the prospectus.
The company cites the Suez Canal and the Straight of Hormuz as critical shipping routes for its crude oil business. Four oil tankers were sabotaged near the Straight of Hormuz in May 2019, and a British oil tanker was seized by Iranian forces in the same area in July. The two routes are"subject to political or armed conflict from time to time," Aramco noted, adding that heightened tensions could endanger large deliveries.
The document warns that any major headwinds to Aramco's business could drag the nation's GDP, payments, trade policies, and cash reserves. Additionally, any government funding shortfalls could lead the nation to shift tax policy and collect more from Aramco's revenue. Higher taxes could put pressure on dividends, buybacks, or other shareholder-friendly actions, and drag Aramco share prices lower as investors grow less interested in the firm.FILE PHOTO: Amin H.
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