[Courtesy of Saudi Aramco]
The two companies have signed an initial agreement on the stake sale. Shareholder rights, management and other terms related to Saudi Aramco's investment will be covered by a contract, which has yet to be endorsed by the boards of the two companies, Hyundai Heavy Industries Holdings said.
The investment from the Saudi state oil company which owns 63.4 percent of S-Oil Corp., a refiner in South Korea, comes as the world's largest shipbuilder seeks to achieve an early business recovery. Last year, the shipbuilder achieved the goal of taking shipbuilding orders worth $13.2 billion.
For years, Hyundai Heavy has been involved in sweeping restructuring to ride out a protracted business slump. In 2017, the shipbuilding group spun off non-shipbuilding operations. Hyundai Robotics was separated and renamed as the group's holding company for non-shipbuilding units so that the shipyard in the southeastern city of Ulsan can focus on shipbuilding and engine making.
Hyundai Oilbank's consolidated sales last year rose 31.2 percent on-year to 21.5 trillion won ($19.2 billion), but net profit fell 57 percent to 403.8 billion won and operating profit was down 42 percent to 661 billion won due to falling refining margins.
Hyundai Oilbank's initial public offering (IPO) was sought last year in an effort to raise funds for group-wide restructuring, but the IPO has been delayed. The shipbuilding group plans to set up a large research and development center in Pangyo, a state-sponsored technology hub south of Seoul.
With the acquisition of a 19.9 percent stake, Saudi Aramco will become the second largest shareholder of Hyundai Oilbank, one of South Korea's four refiners including SK Innovation controlled by the SK Group and GS Caltex jointly owned by Chevron, an American energy group, and the GS Group.
reporter
Lim Chang-won
cwlim34@ajunews.com
