UK to offer US$2b loan guarantee for Saudi Aramco
[LONDON] The UK government agreed to a US$2 billion loan guarantee for Saudi Arabian Oil Co at a time that the country has been courting the Saudi energy giant for the world's largest initial public offering.
A spokesman for the Treasury confirmed a Financial Times report published earlier on Thursday. To put the figure in perspective, in the past five years, Britain's export credit agency has provided £14 billion (S$25.05 billion) in support for UK sales abroad.
Prime Minister Theresa May visited the Saudi kingdom back in April and took with her London Stock Exchange Group Plc Chief Executive Officer Xavier Rolet as part of her pitch.
An Aramco listing would be a boost to London, helping politicians make the case that the UK is open for business and remains a financial hub even as it leaves the European Union and its single market. She is not alone in courting the listing. US President Donald Trump and Japanese Prime Minister Shinzo Abe are also lobbying Riyadh to attract Aramco to their domestic exchanges.
London's move comes on the back of Trump's tweet on Nov 5 - so far the most public call to Riyadh. "Important to the United States!" Mr Trump said in the Twitter post in reference to the potential listing.
The Saudis are currently deciding where to stage the offering. Choosing New York in addition to Tadawul, the Saudi exchange, could boost the longstanding strategic alliance between the two countries. Lawyers and bankers working on the IPO had concerns about a New York listing, however, in part due to to strict regulations about oil-reserves disclosure, accounting rules and the potential for litigation.
BLOOMBERG
BT is now on Telegram!
For daily updates on weekdays and specially selected content for the weekend. Subscribe to t.me/BizTimes
Banking & Finance
Great Eastern chairman appeals for patience as shareholders fume over share price ‘disaster’
S&P Global first-quarter profit beats estimates on strong product demand
Thai banks cut rate for some borrowers after push from PM
Money laundering accused who faces 22 charges to plead guilty on May 14
BNP Paribas beats estimates as lower costs offset trading slump
Japan brokerage Daiwa’s Q4 profit more than doubles as markets recover