Saudi Arabia pulls the plug on Aramco float

Saudi Arabia has ditched plans to list state oil magnate Aramco on both international and domestic stock exchanges, according to reports.

Previously labelled as the biggest deal of its kind in history, senior industry figures told Reuters that the decision to call off the initial public offering (IPO) was made “some time ago”, and that financial advisers working on the proposal have been disbanded.

The state-owned oil firm was aiming for a $2 trillion (£1.55 trillion) pricing or higher.

Saudi Arabia has instead turned its head towards acquiring a “strategic stake” in local petrochemicals manufacturer Saudi Basic Industries, they added.

Plans to sell an approximate five per cent stake in Aramco were announced by Crown Prince Mohammed Bin Salman in 2016, billed as a central cog in the kingdom’s economic modernisation drive.

Exchanges in London and New York had been angling for the international tranche of the listing.

The news comes as a blow to bankers and lawyers on both sides of the pond who had been vying for lucrative positions on the mega-float.

Morgan Stanley, JP Morgan and HSBC were reported to be working as global coordinators, while boutique investment banks Moelis & Co and Evercore had been chosen as independent advisers. White & Case had been selected as a legal adviser, according to reports.

One financial adviser told Reuters the listing has been called off “for the foreseeable future”, with even the local float being shelved. Another, however, said the advisers have merely been “put on standby”.

Should it be confirmed, the cancellation of Aramco’s float will mark the end of more than two years of endless speculation and international competition for a slice of the IPO.

US President Donald Trump tweeted late last year that it would “be great if [Aramco] listed in the US”.

Meanwhile in the UK, the Financial Conduct Authority’s decision to adjust its listing rules to accommodate the float stoked controversy.

The regulator justified its activity by arguing state-owned businesses “tend to be different from private sector individuals or entities in both their motivations and their nature”.

The Institute of Directors had warned the FCA against watering down its rules, arguing it was a damaging move for London and the City’s reputation.

Saudi Aramco did not respond to requests for comment last night.