ACWA Power IPO Delayed: Sources

ACWA Power IPO Delayed: Sources

Saudi Arabia’s ACWA Power has reportedly delayed its plans for an initial public offering (IPO), originally expected for later this year, sources familiar with the matter told Reuters.

The Saudi government has been looking to diversify its revenue stream away from its dependence on hydrocarbons, partially through attracting more investment on the stock market.

ACWA Power is the second Saudi company to delay or halt their IPO in the past month. State oil giant Saudi Aramco called off plans for the domestic and international listing in August, which was expected to be the biggest stock floatation in history.

An ACWA Power spokesman declined to comment on the speculation.

The company has $30 billion of assets under management and is partially owned by the Saudi sovereign wealth fund Public Investment Fund.

ACWA Power, whose work includes power development and water desalination, had planned to float a 30% stake in an IPO in Riyadh before the end of the year.  The company had recruited the services of JP Morgan, Citigroup, Natixis, and Riyad Capital, to advise on the process.

One source stated that the IPO would be delayed for at least a year. According to another source the delay is due to problems relating to an ACWA Power project in Turkey.

The $1 billion Kirikkale Power Plant, launched in Turkey by ACWA Power last year, is capable of producing 1,000 megawatts of electricity and meeting 3% of Turkish power demand.

However, the Turkish power market has been tightened recently due to the country’s recent economic downturn and slow reform in the sector.

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