Saudi Arabia Withdraws Aramco Float Plans


According to various reports, Saudi Arabia has turned its back from its plans to list Aramco, a state oil magnate, on both domestic and international stock exchanges.

The Aramco float was previously identified as the biggest deal of its kind in history. Senior industry figures informed Reuters that the resolution to call off the initial public offering (IPO) was made “some time ago,” and that some financial advisers who are working on the proposal have already been disbanded.

The state-owned oil company was aiming for a minimum of $2 trillion (£1.55 trillion) pricing.

Instead, they added that Saudi Arabia has turned its head towards obtaining a “strategic stake” in Saudi Basic Industries, a local petrochemicals manufacturer.

The plans to sell an approximate five percent stake in Aramco were revealed by Crown Prince Mohammed Bin Salman in 2016. It was billed as a central cog in the economic modernisation drive of the kingdom.

The exchanges in New York and London had since been seeking for the international tranche of said the listing.

The news appears to be a blow to lawyers and bankers on both sides of the pond who had been competing for lucrative positions on the mega-float.

According to reports, JP Morgan, HSBC, and Morgan Stanley were all reported to be working as global coordinators, while boutique investment banks Evercore and Moelis & Co had been selected as independent advisers. White & Case had been chosen as a legal adviser.

A financial adviser informed Reuters that the said listing has been called off “for the foreseeable future,” with even the local float being deferred. However, another said that the advisers have simply been “put on standby.”

Should the revelations be confirmed, the cancellation of Aramco’s float will signify the end of the more than two years of unending speculation and international competition for a part of the said IPO.

Late last year, Donald Trump, the President of the United States of America, tweeted that it would “be great if [Aramco] listed in the US.”

Meanwhile, in the United Kingdom, the decision of the Financial Conduct Authority to modify its listing rules in order to accommodate the float prompted controversy.

The regulator has since justified its activity by clarifying that state-owned businesses “tend to be different from private sector individuals or entities in both their motivations and their nature.”

The FCA has been warned by the Institute of Directors against watering down its rules. It argued that it was a damaging move for London and the reputation of the City.

Saudi Aramco did not reply to requests for comment regarding the matter.