How Riyadh’s Saudi Aramco ambitions were thwarted | Financial Times:
Some of the world’s top investment bankers gathered at a Riyadh palace on Saturday to deliver their final recommendations on a project that had consumed the government of Saudi Arabia for the past few years: the initial public offering of Saudi Aramco.
The financiers were there to meet Yasir al-Rumayyan, the state oil company’s chairman and the head of the country’s sovereign wealth fund, along with cabinet ministers and the company’s leadership.
Their message would disappoint the hosts: international investors were unwilling to buy shares in Saudi Aramco anywhere near the $2tn valuation long sought by the kingdom’s powerful Crown Prince Mohammed bin Salman. No amount of sweeteners — from promises of higher dividends to bonus shares for local retail investors — had managed to change that reality.
At the heart of Prince Mohammed’s economic reforms, the IPO was at one time seen as a mechanism to raise $100bn from a 5 per cent share sale and help open up the Saudi economy to foreign investors. Not only was the size of the listing scaled back, so was its scope, along with any plans to list on international exchanges.
Some of the world’s top investment bankers gathered at a Riyadh palace on Saturday to deliver their final recommendations on a project that had consumed the government of Saudi Arabia for the past few years: the initial public offering of Saudi Aramco.
The financiers were there to meet Yasir al-Rumayyan, the state oil company’s chairman and the head of the country’s sovereign wealth fund, along with cabinet ministers and the company’s leadership.
Their message would disappoint the hosts: international investors were unwilling to buy shares in Saudi Aramco anywhere near the $2tn valuation long sought by the kingdom’s powerful Crown Prince Mohammed bin Salman. No amount of sweeteners — from promises of higher dividends to bonus shares for local retail investors — had managed to change that reality.
At the heart of Prince Mohammed’s economic reforms, the IPO was at one time seen as a mechanism to raise $100bn from a 5 per cent share sale and help open up the Saudi economy to foreign investors. Not only was the size of the listing scaled back, so was its scope, along with any plans to list on international exchanges.
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