The world’s biggest oil company Saudi Aramco has become the second-largest shareholder of Hyundai Oilbank by paying its parent group Hyundai Heavy Industries Group 1.37 trillion won ($1.1 billion) for a 17 percent stake, according to a regulatory filing on Tuesday.
This is in line with the investment agreement signed between HHI Group and Aramco on Jan. 28.
HHI Group said it plans to use the proceeds to pay off borrowings to improve its financial structure and to invest in new businesses such as smart ships and smart logistics. The group also said this investment would strengthen cooperation with Aramco in the petrochemical business, including the production of propylene derivatives and high-performance engineering plastics.
As part of strengthening business cooperation between the two companies, Hyundai Oilbank held an extraordinary general meeting last week and named Aramco Trading CEO Ibrahim Qassim Al-Buainain as a non-executive director.
HHI Group’s shipbuilding holding company, Korea Shipbuilding & Offshore Engineering, is currently constructing a shipyard in the King Salman shipbuilding complex by jointly investing with Aramco, United Arab Emirates oil rig construction firm Lamprell and Saudi Arabia’s shipping carrier Bahri. The project is expected to be completed by the end of 2021.
In March next year, HHI plans to set up an engine joint venture with Aramco. The engine plant of the joint venture, which will be built at the King Salman shipbuilding complex, will begin construction in September next year and be completed in May 2022.
By Shin Ji-hye (email@example.com)