South Korean Hyundai Heavy Industries (HHI) Group has completed the sale of a 17% stake in oil refiner Hyundai Oilbank to Saudi Arabia’s state-owned oil giant Saudi Aramco.
The completion follows receipt of all necessary regulatory consents and approvals.
As a result of the transaction, Hyundai Heavy received KRW 1.4 trillion (about USD 1.2 billion). The group said it intends to use the proceeds to pay off debts and improve its financial structure as well as to invest in new businesses such as smart ships and smart logistics.
Furthermore, with the equity investment, the HHI Group plans to strengthen cooperation with Aramco in the petrochemical business, including the production of propylene derivatives and high-performance engineering plastics.
Under the deal unveiled in January this year, Saudi Aramco has become the second-largest shareholder in Hyundai Oilbank. As part of strengthening business cooperation between the two companies, Hyundai Oilbank held an extraordinary meeting on December 12 and named Ibrahim Qassim Al-Buainain, CEO of Aramco Trading, as a non-executive director.
“The investment in South Korea’s Hyundai Oilbank supports Saudi Aramco’s Downstream growth strategy of expanding its global footprint in key markets in profitable integrated refining, chemicals and marketing businesses which enable
Saudi Aramco to place crude oil and leverage its trading capabilities,” Saudi Aramco said in a separate statement.
Apart from Hyundai Oilbank, HHI and Saudi Aramco have been collaborating in many areas including shipbuilding and engine construction. The parties are jointly working on the ongoing construction project to build Saudi Arabia’s largest shipyard as part of the nation’s industrial development plan dubbed “Vision 2030”. The shipyard is expected to be completed by the end of 2021.
In addition, the companies plan to establish an engine joint venture in March next year. To be constructed at the King Salman Global Maritime Industries Complex, the plant is scheduled for completion in May 2022.