Saudi Aramco board sees too many risks for New York IPO

Marco Green
August 30, 2019

Saudi Aramco is considering a plan to split the world's largest IPO into two stages, debuting a portion of its shares on the Saudi stock exchange (Tadawul) later this year, and following up with an global offering in 2020 or 2021, reported the Wall Street Journal on Thursday, citing people familiar with the plans.

In a blow to the United Kingdom, the world's biggest company is said to have lost its enthusiasm for the City because of the rising chance of a No Deal Brexit.

It means Aramco, which is controlled by the Saudi Arabian government, is leaning towards Tokyo for its highly-anticipated stock market debut.

Impending Brexit for Britain has apparently hurt the chances of London raking in potentially $1bn (£821m) in fees from state-owned oil titan Saudi Aramco, which is looking to list on a foreign stock exchange.

The Saudi energy minister, Khalid al-Falih, reignited plans for the float earlier this summer after announcing that officials were working to list the company within the next two years.

If confirmed, that would be a setback for London, New York and Hong Kong, which have all vied for a slice of the much-touted IPO.

The planned IPO forms the cornerstone of a reform programme envisaged by Crown Prince Mohammed bin Salman to wean the Saudi economy off its reliance on oil.

A USA congressional inquiry found links between Saudi Arabia and the terrorists although its official report was heavily redacted and has never been published in full.

The company is taking steps to increase its transparency as part of the Saudi government's push to open the country to global investment, and diversify its economy beyond its enormous oil reserves.

Last night a spokesman for the Treasury declined to comment.

Past year the UK's City watchdog changed its listing rules, in a move widely viewed as a move created to encourage Aramco to list in London.

Other reports by Click Lancashire

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