Saudi Arabia is pressuring wealthy nationals into taking part in Aramco’s
upcoming IPO, The Financial Times reports, citing sources in the know.
The report follows another one, by Bloomberg, which also cited sources
saying Riyadh had approached some of the richest families in Saudi Arabia about
potentially becoming anchor investors in the listing.
Oddly enough, some of the families approached to be anchor investors -
helping to ensure a successful sale in the Aramco IPO - have relatives that
were part of the 2017
purge when Saudi Arabia’s leadership locked officials and businessmen in
the Ritz-Carlton hotel in Riyadh in what the rulers said was an
anti-corruption drive.
According to the FT sources, Riyadh’s approach was not exactly friendly.
Words including “strong arm”, “coerce” and “bully” were used to describe the
way Saudi Arabia’s government was trying to secure the anchor investors for
what many see as the deal of the century in oil and the largest IPO ever.
One of the wealthy Saudis targeted by Riyadh as Anchor investors was
Alwaleed bin Talal—a celebrity billionaire who was held at the Ritz-Carlton
for three months and who, like the others detained at the hotel, was only
freed after he agreed to transfer substantial financial assets to the
government. To date, many of his remaining assets in the Kingdom remain
frozen but, according to the FT sources, he was offered access to them if
only to use them to buy into Aramco. Related:
SoftBank Urges WeWork To Pause IPO Plans
It seems Riyadh is nervous about the deal of the century. Crown Prince
Mohammed wants the state oil company to be valued at $2 trillion, which would
mean $100 billion in proceeds from the IPO, but there are many doubts
surrounding this target valuation.
The recent attacks on Saudi oil infrastructure have
not helped, either. Despite the world-class assets and the fact that
Saudi Aramco pumped just below 10 million bpd before the attacks - or more
than the world’s top four listed oil companies combined - financial analysts
and investors told Bloomberg earlier this week that the valuation of the
company may not fully account for major supply disruptions like the current
one.
By Irina Slav for Oilprice.com
