Saudi Aramco considering stake sale to Chinese investor: report
16 October 2017
Saudi Aramco, which was to come out with an initial public offer of share in the international market, is now reported to be considering the sale of a stake to a Chinese investor as the IPO looked getting delayed beyond its 2018 target, reports quoting sources familiar with the matter said on Friday.
If the private placement of shares to the Chinese investor materialises, it could be a precursor of the initial public offer, which is expected to be the world's largest stock sale.
The sale of stake in Aramco is a key component of the Saudi government's economic reform programme - the National Transformation Program (NTP) - which aims to diversify out of its key dependence on oil exports.
Reports, however, said the sources declined to name the investor or quantify how much of Aramco would sell.
Besides the stake sale, the NTP aims at removing some state subsidies and raising taxes so as to bridge the huge budget deficits caused by lower oil prices.
While some austerity measures helped shrink the deficit to some extend, the government needs money to take the economy out of recession amidst falling consumer prices and rising unemployment that has touched 12.8 per cent.
Saudi Aramco, however, said while there are a range of options before the company, no decision has been taken and the IPO process remains on track.