Saudi Arabia’s long-awaited public listing on a foreign stock exchange has been delayed by divisions within central government in Riyadh, according to reports.
The unprecedented move, which would see a 5% stake floated on either the London or New York stock exchange, would seek to raise around £100bn for the Saudi state on the back of what would be the largest IPO in history.
The sale is a central plank of crown prince Mohammed bin Salman’s (widely known as MBS) Vision 2030 programme for reforming the stagnating Saudi economy. Saudi Aramco, headquartered in Dhahran in the kingdom’s Eastern Province, is one of the world’s largest companies, thought to be worth upwards of $2tn. The country’s national oil company is also, according to Bloomberg, the world’s most profitable firm.
News of the further delay to the launch comes amid a flurry of negative news for the Saudi economy, as investors remain unnerved by a recent government crackdown, record numbers of expats are leaving the country and unemployment has reached a new high of 12.9%. FDI has fallen from $18.2bn in 2008 to just $1.4bn in 2017.
The government, led by MBS, has sought to boost the ailing economy. So far in 2018, the state has raised electricity and petrol prices and introduced VAT for the first time.
The Saudi Aramco public listing would be the largest flotation of a company in global financial history. The move, which had been re-scheduled to 2018, is now thought to be pencilled in for later in 2019 amid cabinet fears that the opaque Saudi economy could be opened to foreign scrutiny.
Reports suggest MBS has clashed with his minister for energy, Khalid al-Fatih, who suggested the sale was bad for the country’s economy.