UK government is offering Saudi Aramco a $2bn loan - Soul 2 Soul Mates Blog

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11/09/2017

UK government is offering Saudi Aramco a $2bn loan

UK government is offering Saudi Aramco a $2bn loan
The UK government is finalising a $2bn loan guarantee for the most valuable company in the world - and one which it is currently hoping will list in London.

UK Export and Finance (UKEF), part of the Treasury, is close to signing off a "significant" finance facility with Saudi Aramco, hoping the loan will be used to make purchases from UK businesses.




A spokeswoman told City AM it was unrelated to ongoing efforts to woo the state-owned oil and gas giant, which is currently mulling whether to list on the London Stock Exchange.
She said: “UK Export Finance works to increase UK exports by providing finance to overseas buyers of our goods and services. As part of this, 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. In the coming months UKEF will be running a series of exporter events to help connect British suppliers with Aramco to fully realise the mutual benefits of this support.”
Saudi Arabia is considering floating five per cent of the firm, which crown prince Mohammed bin Salman recently indicated was worth more than $2 trillion.
However, there is little transparency around the firm and its listing has proved divisive within the City and Westminster.
Both Conservative MPs such as Treasury select committee chair Nicky Morgan and Labour MPs such as Rachel Reeves, who heads the Business, Innovation, Enterprise and Skills committee, have urged caution.




But Downing Street this week said the LSE had a "strong case" for attracting the mega-float, shortly after US President Donald Trump began making overtures on behalf of the New York Stock Exchange.
The loan comes on the top of almost £500m already handed to the oil and gas giant over the last five years, most recently for the Sadara chemicals project, Saudi Aramco's joint venture with Dow Chemicals.
It follows the doubling of UKEF’s market capacity limit to a maximum of £5bn in the 2016 Autumn Statement.




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