The UK government agreed to a $2 billion loan guarantee for Saudi Arabian Oil Co. at a time that the country has been courting the Saudi energy giant for the world’s largest initial public offering.
A spokesman for the Treasury confirmed a Financial Times report published earlier on Thursday. To put the figure in perspective, in the past five years, Britain’s export credit agency has provided £14 billion ($18 billion) in support for UK sales abroad.
Prime Minister Theresa May visited the Saudi kingdom back in April and took with her London Stock Exchange Group Plc Chief Executive Officer Xavier Rolet as part of her pitch.
An Aramco listing would be a boost to London, helping politicians make the case that the UK is open for business and remains a financial hub even as it leaves the European Union and its single market. She is not alone in courting the listing. US President Donald Trump and Japanese Prime Minister Shinzo Abe are also lobbying Riyadh to attract Aramco to their domestic exchanges.
London’s move comes on the back of Trump’s tweet on Nov. 5 — so far the most public call to Riyadh. “Important to the United States!” Trump said in the Twitter post in reference to the potential listing.
The Saudis are currently deciding where to stage the offering. Choosing New York in addition to Tadawul, the Saudi exchange, could boost the long-standing strategic alliance between the two countries. Lawyers and bankers working on the IPO had concerns about a New York listing, however, in part due to to strict regulations about oil-reserves disclosure, accounting rules and the potential for litigation.