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In Latest Saudi Shakedown, Aramco "Taps" Prince Al-Waleed For IPO Money

In Latest Saudi Shakedown, Aramco "Taps" Prince Al-Waleed For IPO Money

Back in November 2017, a number of prominent Saudi Arabian princes, government ministers, and business people were arrested in Saudi Arabia a few weeks after the creation of an anti-corruption committee led by Crown Prince Mohammad bin Salman. Among them was one of Saudi Arabia's wealthiest men, billionaire Prince Al-Waleed bin Talal, who along with the other arrested individuals was confined in the Riyadh Ritz-Carlton and was only released months later after he pledged an unknown amount of money to the Saudi treasury. While the Crown Prince dubbed the arrests an anti-corruption exercise, it was plain that Saudi Arabia, then facing a gaping budget deficit had engaged in nothing short of a massive extortive shakedown. 

Two years later Saudi Arabia is engaging in a similar shakedown, only this time instead of very broad "uses of funds", it hopes to narrow down the extorted money solely for one purpose - to get more "willing" Aramco anchor investors.

And just like in 2017, Prince Al-Waleed - one of the largest investors in Twitter - is once again in the crosshairs.

As Bloomberg reports, one day after China tentatively agreed to invest $5 to $10 billion in the Aramco mega IPO which has so far found precisely zero anchor investors, Saudi Arabia was "negotiating commitments" from its wealthiest citizens to buy stock in the Aramco initial public offering. Translation: MbS gave his oligarchs a choice - invest in Aramco, or spend some more time in the Riyadh Ritz Carlton. Among those Riyadh has reportedly approached include the Olayan family and Prince Alwaleed Bin Talal to low-profile tycoons in the oil producer’s backyard.

Following polite but stern and "convincing" discussions with MbS and his goon squad, the billionaire Olayans, who own a major stake in Credit Suisse, are said to be considering buying several hundred million U.S. dollars worth of Aramco shares, according to the people. Prince Alwaleed - who knows too well what happens if he disagrees with the Crown Prince - has also "held talks" to commit a significant amount to the IPO.

Many others have also been ordered to "volunteer" their funds for the upcoming IPO according to Bloomberg: Aramco representatives have been seeking an investment from the Almajdouie family, whose businesses range from distributing Hyundai cars in the kingdom to a large logistics operation. They have also approached members of the Al-Turki clan, who are involved in fields from real estate to general trading, food distribution and ports.

Even though Bloomberg claims that so far there’s no certainty the wealthy investors will place orders, we beg to differ and suggest that when told by the government to buy, they will buy... and will do so at any valuation, even an insane one. Saudi Crown Prince Mohammed Bin Salman has long insisted the state oil company is worth $2 trillion, a figure that many Western fund managers have balked at, with some proposing a valuation as low as $1 trillion (or less, depending on the price of oil).

Tyler Durden Thu, 11/07/2019 - 18:45

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