Aramco acquires 17% of Hyundai Oilbank’s stock

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Aramco acquires 17% of Hyundai Oilbank’s stock

Saudi Aramco, the world’s largest oil company, has become the second-largest shareholder of Hyundai Oilbank, the country’s smallest refiner.

Hyundai Heavy Industries (HHI) Holdings on Tuesday announced in a regulatory filing it secured 1.37 trillion won ($1.23 billion) from Saudi Aramco by selling the shares of Hyundai Oilbank. The deal followed the agreement HHI Holdings signed with Aramco on Jan. 28.

Saudi Aramco, which has a market cap of $2 trillion, now owns 17 percent of the oil refiner, while HHI Holdings owns 74.13 percent in its refining subsidiary.

Aramco has partnered with other Korean firms, like S-Oil and SK Innovation. It is the largest shareholder in S-Oil, with a 63.41 percent stake. It also acquired 70 percent of Saudi chemical firm Sabic, which formed the Sabic SK Nexlene Company joint venture with SK Global Chemical, a subsidiary of SK Innovation.

Hyundai plans to use the newly raised funds to improve its financial structure and invest in new businesses, such as smart ships and smart logistics.

Hyundai further plans to cooperate with Aramco in the petrochemical business, such as in the production of high-performing plastics and propylene derivatives.

Apart from oil, Hyundai is working with Aramco in businesses like shipbuilding and engine production in line with the Saudi government’s vision to cut the country’s economic dependence on oil.

Korea Shipbuilding & Offshore Engineering, the HHI Holdings shipbuilding company, is constructing the King Salman International Complex for Maritime Industries in cooperation with Aramco, Lamprell - an oil rig construction operator based in the United Arab Emirates - and Saudi Arabia’s Bahri. Construction is scheduled for the end of 2021.

HHI Holdings further plans to establish an engine joint venture with Aramco in March. The engine plant will be constructed in the King Salman shipbuilding complex. Construction will begin in September and production is scheduled for May 2022.

As part of the effort to boost business ties with Aramco, HHI Holdings last week registered Ibrahim Qassim Al-Buainain, CEO of Aramco Trading, as non-executive director.

“Based on the latest investment in shares, Hyundai Oilbank plans to expand the range of collaboration,” said a spokesperson for HHI Holdings.

BY JIN MIN-JI [jin.minji@joongang.co.kr]

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