Saudi Aramco plans to invest $1.6 billion in South Korean refiner Hyundai Oilbank

Hyundai Oilbank has a total of 650,000 barrels per day of refining capacity in the southwestern city of Daesan and also aims to expand its petrochemical business. (AFP)
Updated 14 February 2019
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Saudi Aramco plans to invest $1.6 billion in South Korean refiner Hyundai Oilbank

  • Saudi Arabia is the top crude oil supplier to South Korea, the world’s fifth-biggest importer
  • Hyundai Oilbank has a total of 650,000 barrels per day of refining capacity

SEOUL: Saudi Aramco plans to invest up to $1.6 billion for a nearly 20 percent stake in South Korean refiner Hyundai Oilbank, expanding its foothold in one of its biggest Asian buyers of crude oil.
Saudi Aramco is already the biggest shareholder in South Korea’s No.3 refiner, S-Oil Corp, with a 63.41 percent stake, and the latest deal should help Aramco boost crude oil sales to Hyundai Oilbank, the South’s smallest refiner by capacity.
Saudi Arabia is the top crude oil supplier to South Korea, the world’s fifth-biggest importer.
In 2018, South Korea imported 323.17 million barrels of crude from the kingdom, or 885,408 barrels per day (bpd), according to data from Korea National Oil Corp.
Saudi Aramco’s chief executive told Reuters in November that it planned to expand its market share in Asia — including China, India, Malaysia and Indonesia — and Africa.
Saudi Aramco said it plans to buy a stake of up to 19.9 percent of Hyundai Oilbank from Hyundai Heavy Industries Holdings, which now owns 91.13 percent of Hyundai Oilbank.
“Saudi Aramco seems to be boosting investments in downstream projects ahead of an initial public offering,” said Lee Dong-wook, an analyst at Kiwoom Securities.
Saudi Energy Minister Khalid Al-Falih said in early January that the state oil giant will be listed by 2021.
Aramco, the world’s largest crude producer, plans to increase investment in refining and petrochemicals in a bid to cut its reliance on crude as demand for oil slows.
Hyundai Oilbank has a total of 650,000 barrels per day of refining capacity in the southwestern city of Daesan and also aims to expand its petrochemical business.
In May last year, it announced plans to build a 2.7 trillion won petrochemical plant with South Korea’s Lotte Chemical.
Saudi Aramco plans to value Hyundai Oilbank at 10 trillion won, or 36,000 won per share, Hyundai Heavy Industries Holdings said in a statement.
A person familiar with the matter said the company plans to offer a discount of 10 percent to Saudi Aramco in a block deal that will require board approval from both firms.
News of the stake sale drove up shares of the parent company by as much 6.6 percent.
Hyundai Heavy Industries Holdings also said it planned to “reconsider” the stock market listing of the refinery arm after completing the stake sale, possibly this year.
Hyundai Oilbank, which had aimed to list on South Korea’s stock exchange in 2018, delayed the plan until this year due to regulatory scrutiny of its balance sheet.
The holding company, which also includes shipbuilder Hyundai Heavy Industries, said it would use the funds from the Oilbank deal to invest in new businesses and improve its financial health.
The shipbuilding firm is part of a joint venture with Saudi Aramco and others to build a shipyard on Saudi Arabia’s eastern coast.


Workplace messaging startup Slack to list on Wall Street

Updated 26 April 2019
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Workplace messaging startup Slack to list on Wall Street

  • The direct listing will raise no cash for the California-based firm but will enable employees and early investors to sell their shares in the fast-growing tech firm
  • Slack, which has become a popular application for businesses looking to move away from email to real-time messaging, said it had some 10 million users at the end of January

WASHINGTON: The workplace messaging startup Slack filed documents Friday to list its shares on the New York Stock Exchange, the latest of a group of richly valued tech enterprises to look to Wall Street.
The “direct listing” will raise no cash for the California-based firm but will enable employees and early investors to sell their shares in the fast-growing tech firm.
Slack, which has become a popular application for businesses looking to move away from email to real-time messaging, said it had some 10 million users at the end of January.
That included 88,000 paying customers and 65 of the Fortune 100 firms.
“Our vision is to make people’s working lives simpler, more pleasant and more productive,” Slack said in its filing with the Securities & Exchange Commission.
“Slack is a new layer of the business technology stack that brings together people, applications, and data — a single place where people can effectively work together, access hundreds of thousands of critical applications and services, and find important information to do their best work.”
Slack, which has users in 150 countries, has raised more than $1 billion from investors with the latest round valuing the company at $7.1 billion, making it one of the most richly valued “unicorns” — startups with private funding worth at least $1 billion.
In its first release of financial data, Slack said it lost $141 million in the 12 months to January 31 on revenue of $400 million.
Created in 2013, Slack has been a leader in the new segment but faces competition from the likes of Microsoft, Facebook and others offering workplace collaboration tools.
Analysts say Slack has found a niche, especially among small- and medium-sized businesses.
Its clients include software giant Oracle, the French luxury goods maker LVMH, Liberty Mutual insurance and the NASA Jet Propulsion Laboratory.
It is available in eight languages and gets about one-third of its revenue from outside the United States.
Slack’s chief executive and founder Stewart Butterfield was part of the team that started the photo-sharing service Flickr.
The direct listing, which was also used by the streaming music giant Spotify, does not add fresh capital to the firm but enables free trading of shares while avoiding the underwriting costs of a public offering.
Slack will trade under the symbol “SK.”