Aramco in stake sale talks with Chinese investor
dubai/new york — Saudi Aramco is considering the sale of a stake to a Chinese investor as plans for its highly-anticipated international public offering are pushed beyond its 2018 target, sources familiar with the matter said on Friday.
The initial public offering is expected to be the world’s largest stock sale, and is a key component of the Saudi government’s economic reform programme which aims to diversify the desert kingdom away from its reliance on oil exports.
A private placement of shares in the state oil company to a Chinese investor is being evaluated as a precursor to the international IPO, according to two sources who spoke on condition of anonymity as the information was not public.
They declined to name the investor or how much of Aramco would be sold.
The move would provide Saudi Arabia with cash to help implement the National Transformation Programme (NTP), as the reform package is formally known, according to one of the sources.
The NTP comprises a number of difficult economic adjustments for Saudi Arabia — including removing some state subsidies and raising taxes — that are aimed at taming huge budget deficits caused by lower oil prices.
Aramco’s dual listing on the Saudi stock market, Tadawul, and an international exchange had been earmarked for 2018 by the Saudi authorities — with stock markets in New York, London and Asia all vying for the offering.
A decision on which exchange would secure the offering has still not been made, with top members of the government preferring New York and Aramco’s financial and legal advisers advocating London.
The third source added an international IPO beyond 2018 was still very much an option, while a Tadawul listing was on track for 2018, pointing to comments from senior Saudi officials. — Reuters