- FT: UK Treasury preparing to guarantee a $US2 billion loan to Saudi Aramco.
- The move comes as London vies with New York and Hong Kong for a slice of the Saudi oil company’s blockbuster IPO next year.
- Former Permanent Secretary to the Treasury Nick Macpherson attacks the move as “mercantilism” and “state aid” on Twitter.
LONDON — A former senior civil servant at the Treasury has attacked the government’s decision to backstop a $US2 billion (£1.5 billion) loan to Saudi Arabia’s state oil company in an apparent bid to woo the company to list in London.
The Financial Times reported on Thursday that the Treasury is “finalising” a $US2 billion loan guarantee for Saudi Aramco, the state oil company that is gearing up for what would be the world’s biggest ever stock market float.
Britain is among the countries wooing Saudi Aramco, which is considering listing some shares abroad. Outgoing London Stock Exchange CEO Xavier Rolet accompanied Prime Minister Theresa May on a recent visit to Saudi Arabia to lobby for London to get a slice of the IPO.
Nick Macpherson, who was Permanent Secretary to the Treasury from 2005 to 2016, criticised the move on Twitter.
A UK Treasury spokesperson told the FT: “We will be providing Saudi Aramco with support in the form of credit guarantees to procure from the UK. This builds on previous support for UK exports as part of Saudi Aramco joint venture projects.”
The UK has proposed a series of new rules around stock market listings some observers said were created to attract Aramco to London. The UK regulator has denied this is the case. The new proposals would create a new category “within its premium listing regime” for sovereign-owned companies looking to enter the market.
New York, Hong Kong, and Tokyo are also lobbying Saudi Arabia for a slice of the mammoth IPO, set for next year. Saudi Aramco could have a market capitalisation of as much as $US2 trillion. Saudi officials have signalled that the company is not guaranteed to list shares outside of the Kingdom.
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