Saudi King Shelved Aramco IPO To Teach Son, Prince Bin Salman A Lesson | WHAT REALLY HAPPENED

Saudi King Shelved Aramco IPO To Teach Son, Prince Bin Salman A Lesson

As was first reported in early 2016, for the past two years Saudi Arabia had been preparing to place up to 5% of its national oil company, Saudi Aramco, on the stock market. Officials talked up the Aramco initial public offering with international exchanges, global banks and President Donald Trump.

The planned listing was supposed to be the cornerstone of the kingdom’s promised economic overhaul and, at a targeted $100 billion, the biggest IPO ever. More importantly, it was the brainchild of 32-year-old Crown Prince Mohammed bin Salman, heir apparent of the world's largest oil exporter and the effective head of OPEC.

However, after months of setbacks, the deal came to a crashing halt after the international and domestic legs of the IPO were pulled earlier this month.

The reason, according to Reuters: King Salman - the prince's father - stepped in to shelve it.

The decision came after the king met with family members, bankers, and senior oil executives, including a former Aramco CEO, said one of the sources, who requested anonymity. Those consultations took place during Ramadan, which ended in the middle of June.

Having been seemingly asleep for the prior two years, The king's interlocutors told him that the IPO, far from helping the kingdom, would undermine it. Their main concern was that an IPO would bring full public disclosure of Aramco's financial details, something we knew from prior reports on why the IPO was problematic.

Then, in late June, the king sent a message to his administrative office, demanding that the IPO be called off: the king's decision is final, a Reuters source said.

"Whenever he says 'no', there is no budging," the source said, although it wasn't clear just what the King was so afraid would be discovered as part of the IPO due diligence.

Unwilling to telegraph the confusion, if not chaos, between the two top Saudis, Energy Minister Khalid al-Falih said the government was still committed to conducting the IPO at an unspecified date in the future. A senior Saudi official referred Reuters to that statement and repeated that the government, Aramco’s shareholder, was working towards an IPO when conditions were right.