Saudi King Shelves Aramco Initial Public Offering

The Saudi king spoke and a $2 trillion dream went up in smoke.

For the past two years, Saudi Arabia had prepared to place up to 5% of its national oil company on the stock market, Reuters reported. Officials talked up the Saudi Aramco initial public offering with international exchanges, global banks and US 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 prince’s father, King Salman, stepped in to shelve it, three sources with ties to government insiders said.

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 administrative office, demanding that the IPO be called off, the three sources said. The king’s decision is final, a second source said. After Reuters reported last week that the deal had been shelved, Energy Minister Khalid al-Falih said the government was committed to conducting the IPO at an unspecified date in the future.