By Costas Paris
South Korea's Hyundai Heavy Industries Holdings Co., the parent company of the world's largest shipbuilder, said it signed a $1.2 billion deal to sell a stake in its oil-refining unit to Saudi Aramco.
The sale's proceeds will help the Hyundai Heavy Industries Co. shipbuilding unit fund its $2 billion acquisition of rival shipyard Daewoo Shipbuilding & Marine Engineering Co., people with knowledge of the deal said. The deal was announced in January.
Hyundai on Monday said in a regulatory filing that it would sell a 17% stake in Hyundai Oilbank Co. to government-owned Aramco, known officially as Saudi Arabian Oil Co., the world's largest crude exporter. The Saudi oil giant also has an option to buy an additional 2.9%.
The merger of Hyundai Heavy and DSME is set to be completed this year and will create a behemoth controlling 20% of the global market for new ships, and an even bigger share of the fast-growing market for liquefied natural gas carriers.
The $2 billion all-stock deal follows $2.25 billion in state liquidity support that Seoul granted DSME following a $2.6 billion bailout in 2017.
The oil deal will make Saudi Aramco the second-largest holder of Hyundai Oilbank. Hyundai Motor Co. holds another 4.3%, and the Hyundai holding parent will retain a 74.1% stake, according to a person with knowledge of the deal.
In a separate deal, Saudi Arabia's Public Investment Fund is looking to sell its 22% stake in national oil shipping company Bahri Oil to Saudi Aramco, shipping executives said.
Bahri is one of the world's top tanker operators, with a fleet of 45 very large crude carriers and 36 chemical product tankers.
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