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Britain to provide Saudi Aramco with $2 billion credit guarantees

Reuters  |  LONDON 

By Andy Bruce and Dasha Afanasieva

(Reuters) - will provide $2 billion in credit guarantees to so it can buy British goods and services more easily, but denied it was part of efforts to persuade the energy giant to list its in

The loan agreement comes as Stock Exchange, with backing from British Prime Minister Theresa May, competes to host part of Aramco's initial public offering (IPO), which is expected to be the biggest float ever.

"This builds on previous support for UK exports as part of joint venture projects," the government said in a statement on Thursday, while a spokesman for Britain's finance ministry said the guarantees were not part of the country's attempt to secure the IPO for

officials have said domestic and international exchanges, including New York, London, Tokyo and Hong Kong, have been considered for a partial listing of the state-run firm.

Britain's financial regulator has proposed new rules to allow sovereign-controlled entities like to have their own 'premium listing' category while being exempt from requirements such as how much of a company has to be floated.

The British government and the City of are keen to win the listing as a boost to the country's capital markets just as is preparing to leave the European Union.

However, some fund managers oppose the proposals, which they say would erode the rights of minority investors.

"(Britain's government) guaranteeing a loan to would be a further lurch in descent to mercantilism," Nick Macpherson, who was top civil servant at the finance ministry until last year and is now chairman of C. Hoare and Co private bank, said on Twitter.

Crown Prince Mohammad bin Salman said last month that the IPO, part of an ambitious plan to diversify the economy beyond oil, was on track to go ahead in 2018.

The $2 billion facility is being finalised by UK Export Finance, a ministerial department which works to increase British exports by providing finance to overseas buyers of the country's goods and services.

(Reporting by Andy Bruce and Dasha Afanasieva; editing by Alexander Smith)

(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)

First Published: Thu, November 09 2017. 22:29 IST
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