London listing plans to open door to Saudi Aramco

13 Jul 2017   Saudi Arabia

The UK’s financial watchdog is making it easier for state-owned companies to list their shares in what will be a boon for those lobbying for Saudi Aramco to choose London for its initial public offering. The Financial Conduct Authority said on Thursday it is planning to create a category for sovereign-owned companies that are looking to privatise. The move is part of broader plans by the FCA to reform equity and debt markets in an attempt to keep the UK open for business after Brexit. The plans involve creating a category within the “premium” listing rules for companies controlled by sovereign entities rather than by oligarchs or other private groups. Saudi Arabia is seeking to sell 5 per cent of national oil company Saudi Aramco in what is set to become the world’s biggest flotation, with a valuation officials hope will reach $2tn and which would be a fee bonanza for the advisers working on the deal. Saudi Aramco is the world’s biggest oil producer, pumping about one in every nine barrels of crude globally. The kingdom has narrowed its choice of venue for the IPO, scheduled for late 2018, to New York and London. Theresa May, prime minister, and Xavier Rolet, head of the London Stock Exchange, travelled to Saudi Arabia this year in a lobbying effort. The UK listing regime had to tighten controls in 2013 after a string of corporate governance failures in overseas-headquartered companies controlled by foreign tycoons, including ENRC and Bumi.

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