Russian and Chinese investors in talks about Saudi Aramco IPO involvement

The initial public offering of the world’s biggest oil company is reaching a critical phase. (AFP)
Updated 15 October 2019

Russian and Chinese investors in talks about Saudi Aramco IPO involvement

  • The initial public offering of the world’s biggest oil company is reaching a critical phase

RIYADH: Russian and Chinese investors are keen to be involved in the international element of the forthcoming initial public offering of Saudi Aramco, a Russian business leader told Arab News on Monday.

“I would say that some Russian investors are interested,” said Kirill Dmitriev, chief executive of the Russian Direct Investment Fund (RDIF).

“For the sovereign wealth fund (RDIF) to invest in the Aramco IPO is still under discussion. We also have our Russia-China Investment Fund, and we have interest from Chinese investors to get involved in the Aramco IPO. We are still in discussion with our Chinese partners, and with our Russian investors.

“We are thinking what would be the different opportunities, given the interests of China and given the interest of some of the Russian investors. We will have to see how some of the details go, and nothing has been finalized, but there is definitely interest from some Russian and Chinese investors.”

The IPO of Saudi Aramco, the world’s largest oil company, is reaching a critical phase; some observers believe the formal announcement of a listing on the Tadawul, the Saudi stock exchange, is just days away. Having a foreign sovereign investor, as well as a listing on a foreign stock exchange, could be a part of the later strategy to sell about 5 percent of the state-owned company to private investors.

Dmitriev spoke to Arab News in Riyadh at the Saudi Russia CEO Forum, a meeting of top businessmen from both countries to coincide with the visit of President Vladimir Putin. Executives signed a raft of deals as business relations between Saudi Arabia and Russia become increasingly cordial.

“The RDIF jointly with the Public Investment Fund has already invested in 30 different companies, generating very good returns,” Dmitriev said. 

“Today we are signing others in sectors ranging from launching satellites from Saudi territory to railroads to joint projects in petrochemicals to our agreement with Salec for investment in agriculture, as well as in aircraft and other areas.”

He said investment between the two countries would increase more than fivefold in the next two years, and congratulated the Saudi government on Vision 2030 and opening the Kingdom to investment.

Among the deals announced at the Forum was an agreement between RDIF and Tania, the Saudi technology development company, to co-operate on a project to establish commercial launch services for small spacecraft, and an agreement to explore ways for Russian and Saudi railway operators to build transport infrastucture.

Russian and Chinese investors also came together with leading Middle East investors to launch a new pharmaceuticals group, Alium.

Dmitriev said investment prospects in the US were becoming increasingly expensive, and that Russia offered the opportunity for Saudi investors to generate annual returns of about 15 percent.


Emirates trims Boeing shopping list amid 777X delays

Updated 20 November 2019

Emirates trims Boeing shopping list amid 777X delays

  • The Middle East’s largest airline in 2017 signed an initial agreement to buy 40 Boeing 787-10s in a deal worth $15.1 billion
  • But Emirates’s purchases overhaul reduces the order to 30 planes

DUBAI: Emirates Airline on Wednesday slimmed down its purchasing plans with Boeing amid delays in delivering an order of 156 of the new long-range 777X aircraft, substituting instead 30 of its 787-9 Dreamliners.
The Middle East’s largest airline in 2017 signed an initial agreement to buy 40 Boeing 787-10s in a deal worth $15.1 billion, but the overhaul reduces that to 30.
At the same time, Emirates is cutting its 156-strong order of the larger 777X to 126 planes.
The restructuring means that the carrier now has just 156 aircraft ordered from Boeing, compared to 196 previously in both firm orders and initial agreements, an airline spokeswoman confirmed to AFP.
“Emirates reduced its 777X order of 156 to 126 and substituted them with the Dreamliners,” Emirates president Tim Clark told a news conference at the Dubai Airshow.
Boeing said the airline will update its order book “by exercising substitution rights and converting 30 777 airplanes into 30 787-9s.”
Emirates said in a statement that for the 777X, it “will enter into discussions with Boeing over the next few weeks on the status of deliveries.”
Emirates in 2013 signed a $76-billion contract for 150 Boeing 777X twin-engine aircraft, powered by GE’s new GE9X engine, in what was the single largest order by value in the history of US commercial aviation.
The order was subsequently increased to 156 planes.
The 777X was originally scheduled to take off on its first test flight this summer, however its development has been slowed by issues with the engine and Boeing has pushed back the timeframe to early 2021.
The delays also hit as Boeing is in the process of completing changes required by regulators on the 737 MAX, which has been grounded worldwide after two crashes that resulted in 346 deaths.