Saudi Aramco pays $ 1.6 billion for ownership in South Korea's Hyundai Oilbank By Reuters

By Hyunjoo Jin

SEOUL (Reuters) – State-owned Saudi Aramco plans to buy a stake of up to 19 , 9 percent of South Korean refinery Hyundai Oilbank from Hyundai Heavy Industries Holdings, won $ 1[ads1].8 billion ($ 1.61 billion), driving up stock at 6.6 percent.

South Korea is a major market for Saudi Aramco, the largest shareholder in its No.3 refiner, S-Oil Corp.. The agreement will help Aramco increase sales of crude oil to Hyundai Oilbank, Sørens smallest refineries by capacity.

Its parent, who now owns 91.13 percent of Hyundai Oilbank, said it was planned to "reconsider" the listing of the refining arm after completing the stock sale, possibly this year.

Saudi Aramco plans to value the Hyundai Oil Bank by 10 trillion won, or 36,000 won per share, the parent said in a statement.

A person familiar with the case said the company plans to offer a 10 percent discount to Saudi Aramco in a block agreement that will require the board's approval from both companies.

"Hyundai Heavy sells the stick at a good price," says Yoon Tae-ho, an analyst at Korea Investment & Securities, adding that the valuation was higher than the expected market.

Hyundai Oilbank, which was planning to list up on South Korea's stock exchange last year, the plan delayed this year due to the law's control of the balance.

The shipbuilding holding company Hyundai Heavy Industries said it would use funds from the agreement to invest in new businesses and improve its financial health

The shipbuilder is part of a joint venture with Saudi Aramco and others to build a trademark on Saudi Arabia's east coast.