UK financial watchdog proposes new rules to bring Saudi Aramco IPO to London
The Financial Conduct Authority (FCA) is pressing ahead with plans to change the current laws to allow Saudi Aramco to choose London to host its Initial Public Offering (IPO), which has been tipped to smash all previous records.
The world’s leading stock exchanges are vying for the right to hold the IPO, which analysts have said could raise as much as $2 trillion, a the energy giant looks to sell off 5% of its assets to boost its coffers that have been hit by more than two years of stubbornly low oil prices.
Under the current rules, companies must sell at least 25% of their shares to gain a ‘premium’ status, far below that being sold by Aramco.
But the City watchdog has launched a consultation on proposals to create a new category within its premium listing regime to cater for companies controlled by a shareholder that is a sovereign country.
If passed, the new rules would allow London Stock Exchange to host the ‘IPO of the Millennium’.
The proposal will address companies controlled by a shareholder that is a sovereign country, as is the case with Saudi Aramco, which is wholly owned by the Saudi’s powers-that-be.
Andrew Bailey, FCA Chief Executive, said: “Regulatory protections for investors lie at the core of the listing regime. However, it is important that these protections remain well-targeted. Refining the listing regime in this way would make UK markets more accessible whilst ensuring that the protections afforded by our premium listing regime are focused and proportionate.
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“Sovereign owners are different from private sector individuals or companies – both in their motivations and in their nature. Investors have long recognised this and capital markets are well adapted to assess the treatment of other investors by sovereign countries.”
The plans are bound to cause controversy and leading figures in the finance world have already warned against such a move, as even at 5% the value of the shares would mean that mean the stock would automatically become a significant part of many passive equity funds. In June, Ashley Hamilton Claxton, Corporate Governance Manager, at Royal London, said that any Aramco IPO “must play by the rules”.
“Any attempt to bend the listing rules in order to facilitate the IPO of Saudi Aramco is highly inappropriate and flagrantly ignores the principles which the UK’s listing rules were designed to defend.
“While the listing would be a prize asset on the exchange due to the sheer size of the firm, the attempt to list just 5 percent of the total share capital flies in the face of what is acceptable.”
Hamilton added that Royal London would be lobbying strongly against any concessions being granted should there be a formal attempt to IPO Aramco in the UK.
The FCA has asked for responses to its consultation by 13 October, and has indicated that it will look to publish responses before the end of the year.
Global Offshore rebrands Enelift and invests in global hubs
Global Offshore has rebranded Enelift and will invest "a seven-figure sum" in establishing new support hubs in Houston, Dubai, Singapore, Perth and the Caspian during the next six months.
The investment will cover oil, gas and renewables, mainly concentrating on manufacturing capability with associated R&D, as well as in stock held in the hubs.
The company’s flagship Hinge Lok technology provides aluminium, non-welded light weight transportation cradle for casing and tubing. Enelift now plans to enhance its offering by augmenting its existing solutions with robotics and remote operational and training technology, which will reduce manpower for handling offshore equipment that is transported and stored using the Hinge Lok system.
Enelift is partnering with "a Japanese robotics company" and the technology will be trialed with "a Norwegian operator on a Norwegian drilling rig", according to a statement.
Operating from its bases in Aberdeen, UK and Esbjerg, Enelift was founded by 35-year industry veteran and Managing Director Paul Brebner 10 years ago to offer the offshore energy industries safe, reliable and efficient storage and transportation of equipment.
The expansion plans are bolstered by the appointment of Jim Clark of the Craigendarroch Group to Chairman, and Adam Maitland to Non-Executive Director. Maitland is the Managing Director of Hutcheon Mearns IF, and brings his wealth of expertise in the field of corporate finance.
Brebner said Enelift may be a new name in the market, but the experience it brings is "industry renowned".
"Our solutions are underpinned by safety that enables inefficiencies and their associated costs to be eradicated – meaning operational personnel can focus doing what they do best, safely. We remain committed to providing the safest storage and transportation solutions for equipment in the sector as we grow our global operations," he said.
Clark said the market is changing and its solutions fully support customers’ economic and safety aspirations.
"We are very well placed to take full advantage of increasing opportunities in the Middle East, Africa, Far East and Americas. Safety is our absolute commitment to our customers and our support hubs will facilitate this. Aligning our identity to our entire offering ensures that we will drive our expansion through new products and global support sites across the rest of this year."