The king has finally spoken and the plan to put up Saudi Arabia's Aramco for public offering was ultimately cut off, sources close to the royal family tipped off the media. If it happened, the deal could have been considered the world's biggest Initial Public Offering (IPO) in history.
Citing a trio of unnamed Saudi government insiders, the report from Reuters said that King Salman bin Abdulaziz Al Saud has finally stepped into the matter, which consequently shelved the USD$2 trillion shares acquisition deal.
The Aramco IPO deal was one of the flagship campaigns of the King's heir apparent, Crown Prince Mohammed bin Salman - a self-proclaimed reformist.
In the past couple of years, the Kingdom has been allocating up to 5 percent of the company's share on the stock market.
As specified in this previous report, the sale of Aramco's shares could have paved way for international regulatory agencies to take a closer look at the company's operations. Moreover, proceeds of the sale could have also helped raise funds that the country needs to compensate for its budget deficit.
However, following months of hurdles and setbacks, Prince bin Salman's brainchild project was pulled out. The decision, as indicated in the Reuters report, came after the older bin Salman met together with other members of the royal family, senior Aramco executives and former board of directors.
The said consultation, as one of the informed sources tipped off, took place during Ramadan - the ninth month of the Islamic calendar observed by Muslims worldwide as the month of fasting.
Apparently, the king has been told that the IPO could have somehow put the company at a very comprising position. Indeed, experts were wary of the plan which could have opened Aramco's financial details in full public disclosure.
As early as June, King Salman has reportedly confirmed to his administrative officers that he didn't want the IPO to push through, further demanding the office to call it off.
According to the sources, the king's decision is final and is no longer subject to negotiation.
Still, a contradicting statement coming from the office of Energy Minister Khalid al-Falih said that the government "remains committed" to the IPO of Aramco although it will happen "at a time of its own choosing."
Saudi Aramco or the Saudi Arabian Oil Company is a state-owned and controlled oil company of the Kingdom of Saudi Arabia. The firm is touted as the world's number one exporter of crude oil and natural gas.
