UK hands world’s largest oil company Saudi Aramco $2bn loan to secure IPO

The UK Government has offered the world’s largest oil company a $2bn (£1.5bn) loan guarantee as the battle to host the Saudi oil giant’s market debut drags on.

The Treasury has admitted to finalising the details of the deal which comes amid a fierce battle between the world’s largest exchanges to secure what could prove to be the world’s largest initial public offering.

The timing of the significant loan has raised eyebrows because Saudi Aramco, the kingdom’s state-back oil giant, is yet to decide where to list 5pc of the oil behemoth in its market debut expected next year.

The float is a central piece within Saudi Arabia’s plans to overhaul its economic future in the wake of the global oil crisis which could leave prices depressed indefinitely.

The listing could raise up to $100m through a joint listing on the Saudi exchange and a foreign partner, but complex rules around transparency has thrown into question which exchange will be able to offer the Saudis the best terms.

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H/t reader squodgy.

“Please can somebody make sense of this.
A financially insolvent country’s Treasury (read Central Bank) just offers a $2Bn sweetener to Saudi Aramco to ‘encourage’ them to list it in London, instead of some other Stock Market like Paris, New York or Frankfurt?????”