Riyadh – Mubasher: The Saudi government seeks to set a mechanism to compensate Saudi Aramco for the financial cost of oil and gas subsidies through special tax deduction before its initial public offering (IPO), according to the Financial Times (FT).
The next stage will include shifting historical debts from foreign governments, including Jordan and Iraq, from Aramco’s accounts on to the government’s books, sources told the newspaper.
The company intends to disclose its 2015 and 2016 financial statements alongside the expected accounts for 2017 to the investors for the first time ahead of the IPO.
Advisers have warned executives and officials that they should resolve the huge financial and legal risks of the company, so that it will not cost Aramco hundreds of billions of US dollars in lost valuation, people told the FT.
The newspaper noted that the subsidy issue was a priority, as the mismanagement of this component could cost Aramco’s valuation $300 billion.
