SOUTH Korean steelmaker, Posco has agreed to sell $1.1bn (£710m) worth of shares in Posco E&C to Saudi Arabia’s Public Investment Fund (PIF).
The deal gives Posco a 38 per cent stake, made up of 10.8m shares in Posco E&C, plus the issuance of 5.1m new shares, it said in a statement to the market yesterday.
The parent company has been seeking to offload assets to help cope with the steel market downturn. Posco will retail control, with a 53 per cent stake.
It hopes that the foreign capital injection will help reduce Posco C&E’s debt ratio, which it has been working on for the past three years.
PIF was established in 2008 as a sovereign wealth fund but has since been restructured in response to the changing energy market and automotive industry and is operated by the Council of Economic Development Affairs.
It currently has $300bn in assets under management.
Posco had made efforts to unload assets to cope with the steel market downturn.