Hyundai Heavy says Aramco buys 17% stake in S.Korean refiner unit for $1.2bn

Mon, 2019-04-15 15:33

SEOUL: The biggest shareholder in South Korean oil refiner
Hyundai Oilbank said on Monday that state-owned Saudi Aramco had
agreed to buy a 17 percent stake in its oil processing operations
for 1.4 trillion won ($1.24 billion).
Hyundai Heavy Industries Holdings said in a regulatory filing that
it had signed a sales agreement with Saudi Aramco that included an
option for Aramco to buy an additional 2.9 percent stake in Hyundai
Oilbank.
The agreement, reached with an Aramco subsidiary, Aramco Overseas
Co. B.V (AOC), will support the mother company’s crude oil
placement strategy by providing a dedicated outlet for Arabian
crude oil to South Korea, Aramco said in a statement.
In late January, Hyundai Heavy said Aramco planned to invest up to
$1.6 billion for as much as 19.9 percent of the South Korean
refiner to expand its foothold in the country.
Aramco bought the stake in the unlisted refiner for 33,000 won per
share, which is slightly lower than its initially planned price,
reflecting market conditions, said an official at Hyundai Heavy who
provided no further details.
The investment is meant to support Aramco’s broader downstream
growth strategy and provide long-term crude oil options and
offtakes as part of the company’s trading business, Abdulaziz
Al-Judaimi, Aramco’s senior vice president of downstream, said in
the statement.
Hyundai Heavy has said it plans to “reconsider” listing its
refinery arm after completing the stake sale.
The Hyundai Heavy official said the company would take its time in
deciding whether to go ahead with its refining arm’s public
listing, without setting a timeframe.
Hyundai Oilbank, South Korea’s smallest refiner by capacity, has
a total of 650,000 barrels per day of refining capacity in the
southwestern city of Daesan and aims to expand its petrochemical
business.

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Source: FS – All-News-Economy
Hyundai Heavy says Aramco buys 17% stake in S.Korean refiner unit for .2bn