LONDON (Reuters) - The king spoke, and a $2 trillion dream went up in smoke.
FILE PHOTO: An Aramco tank is seen at Saudi Aramco's Ras Tanura oil refinery and oil terminal in Saudi Arabia May 21, 2018. Picture taken May 21, 2018. REUTERS/Ahmed Jadallah/File Photo
For the past two years, Saudi Arabia has prepared to place up to 5 percent of its national oil company on the stock market. Officials talked up the Saudi Aramco initial public offering (IPO) with international exchanges, global banks and U.S. President Donald Trump.
The planned listing was to be the cornerstone of the kingdom’s promised economic overhaul and, at a targeted $100 billion, the biggest IPO ever. It was the brainchild of 32-year-old Crown Prince Mohammed bin Salman, heir apparent of the world’s largest oil exporter.
But after months of setbacks, the international and domestic legs of the IPO were pulled.
The reason: the prince’s father King Salman stepped in to shelve it, three sources with ties to government insiders told Reuters.
The decision came after the king met with family members, bankers, and senior oil executives, including a former Aramco CEO, said one of the sources, who requested anonymity. Those consultations took place during Ramadan, which ended in the middle of June.
The king’s interlocutors told him that the IPO, far from helping the kingdom, would undermine it. Their main concern was that an IPO would bring full public disclosure of Aramco’s financial details, the sources said.
In late June, the king sent a message to his diwan, or administrative office, demanding that the IPO be called off, the three sources said. The king’s decision is final, a second source said.
“Whenever he says ‘no’, there is no budging,” the source said.
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