In a regulatory filing on Tuesday, Hyundai Heavy Industries Holdings said it has received Aramco's money as part of a deal on January 28 to acquire a 19.9 percent stake in Hyundai Oilbank for 1.8 trillion won. Aramco first took over a 17-percent stake, while the remaining 2.9 percent will be held as a call option.
As the second-largest shareholder of Hyundai Oilbank, Aramco will strengthen cooperation in high-performance engineering plastics and propylene derivatives. Along with a shipbuilding joint venture in Saudi Arabia, the shipbuilding group plans to set up an engine joint venture with Aramco in March next year for completion in May 2022.
The investment from Aramco which owns 63.4 percent of S-Oil Corp., a refiner in South Korea came as the world's largest shipbuilder seeks to achieve an early business recovery. For years, Hyundai Heavy has been involved in sweeping restructuring. In 2017, the shipbuilding group spun off non-shipbuilding operations.
Hyundai Oilbank's consolidated sales last year rose 31.2 percent on-year to 21.5 trillion won, 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.
In the third quarter of this year, the group's combined borrowing on a consolidated basis stood at 9.69 trillion won, with its short-term borrowing estimated at 4.48 trillion won.
"With this investment, Hyundai Oilbank plans to expand its cooperation in petrochemical fields, including HPC (heavy feed‑based petrochemical complex) which is being promoted together with Lotte Chemical, " a Hyundai shipbuilding group official said. Hyundai Oilbank and Lotte Chemical are pushing for HPC through their joint venture, Hyundai Chemical Corp., to produce 750,000 tons of polyolefins and 400,000 tons of olefins a year.
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