China gathers state-led consortium for Aramco IPO: Reuters

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Reuters,said on Wed, China gathers state-led will act as a cornerstone investor in the initial public offering of Saudi Aramco.

“The planned Chinese investment makes it more likely that the national energy giant would seek a listing in Asia, with Hong Kong currently the frontrunner among bourses in the region”, Reuters added according to what it called “people with knowledge of the discussions”.

Saudi officials have said Chinese companies were interested in investing in the Aramco IPO as the country, but have not commented on how that would be done, Reuters mentioned that.

Half a dozen sources with knowledge of the discussions said China Investment Corporation (CIC), the country’s $800 billion sovereign wealth fund, oil majors Sinopec and Petro China, and the country’s state-run banks were among the state-backed entities set to participate in the Chinese investment consortium.

They did not name the banks. Reuters reported in February that Industrial and Commercial Bank of China International Holdings, a unit of Industrial and Commercial Bank of China, and China International Capital Corporation (CICC) were among the Chinese banks pitching for a role in the IPO.

One person involved in discussions between Aramco and potential Chinese investors said the ultimate size of the consortium’s stake had not yet been decided.

Reuters said, according to its source, the entity that would lead the consortium had also not been decided, with many state-run groups keen to take on the high-profile role. That is likely to be decided by China’s cabinet, the State Council, over the coming months.

“The IPO will help decide whom, or which country, can secure the crude supplies from the company and Saudi Arabia going forward,” the person said, adding the size of each company’s stake in the Chinese consortium would depend on its current relationship with Aramco and the Saudi government.