Monday 15 April 2019 9:00 am

Saudi Aramco takes £1bn stake in South Korean refiner days after record-setting bond issue

The Saudi state oil giant which was recently revealed as the world’s most profitable company will take a 1.4 trillion won (£944m) stake in South Korean refiner Hyundai Oilbank.

Saudi Aramco has agreed to buy 17 per cent of the firm, Oilbank’s biggest shareholder Hyundai Heavy Industries Holdings said in a regulatory filing today.

Read more: Saudi Aramco beats records with $100bn bond demand

The deal includes an option for the oil firm to buy an extra 2.9 per cent stake in Hyundai Oilbank.

It comes after Hyundai Heavy in January said Saudi Aramco would take as much as a 19.9 per cent stake for up to £1.2bn. At 33,000 won per share, the new deal is slightly cheaper per share than originally forecast an official at Hyundai Heavy told Reuters.

Hyundai Heavy is now reconsidering its plans to list the refiner after the deal, it said.

Hyundai Oilbank is South Korea’s smallest refiner with a capacity of 650,000 barrels per day in the south of the country. It is aiming to expand its petrochemicals business.

Read more: Saudi Aramco leapfrogs Apple to claim title as world's most profitable firm

Last week Saudi Aramco raised $12bn (£9bn) in its debut on the bond markets, after getting $demand of $100bn, a world record.

However the initial demand failed to translate into results on the exchange, with the bonds only posting modest increases in the day after they were admitted.