Saudi Arabia’s King Salman has demanded that the initial public offering
of Saudi Aramco be called off, stepping in to shelve the plans of his heir
apparent, Crown Prince Mohammed bin Salman, for what was tipped to be the
world’s biggest IPO ever, Reuters reports,
citing three sources with ties to Saudi government insiders.
Last Wednesday, reports emerged that Saudi
Arabia had called off its highly anticipated, US$100-billion IPO, Reuters
sources said, with even plans to list the state-run oil company on its
domestic bourse, Tadawul, being scrapped. The listing was expected to be the
world’s largest IPO, and the Saudis pegged a large part of the Vision 2030
economic agenda on proceeds from it.
Saudi Arabia immediately denied the reports that the listing was canceled,
with Energy Minister Khalid al-Falih saying in a statement carried by the Saudi
Press Agency:
“The Government remains committed to the IPO of Saudi Aramco at a time of
its own choosing when conditions are optimum. This timing will depend on multiple
factors, including favorable market conditions, and a downstream acquisition
which the Company will pursue in the next few months, as directed by its
Board of Directors.”
According to one of Reuters’ sources, Saudi King Salman held consultations
with family members, oil executives, and bankers in early June. The main
concern over listing Aramco was reportedly that an IPO would require full
disclosure of finances and reserves of the Saudi state oil giant. Related:
International Payments Are Becoming A Geopolitical Battleground
Later in June, the King sent a message to his administrative office—the
diwan—demanding the IPO be called off, the sources told Reuters, with one
source noting that King Salman’s decision is final.
According to the sources, despite the Aramco IPO halt and a blow to Crown
Prince Mohammed bin Salman’s economic reform agenda in which the oil giant’s
listing was a key point, MbS remains the favorite son and heir with vast
powers over various policies.
By Tsvetana Paraskova for Oilprice.com
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