PIF acquires 38% of POSCO Engineering for $1.1bn

Updated 22 June 2015

PIF acquires 38% of POSCO Engineering for $1.1bn

JEDDAH: The Public Investment Fund of Saudi Arabia (PIF) signed an agreement worth $1.1 billion to acquire 38 percent of the equity of Korean POSCO Engineering and Construction Company, on June 15.
POSCO E&C is one of the leading global engineering and construction companies that specializes in engineering and building industrial and energy facilities, infrastructure and urban development, and has several international branches in emerging markets.
The agreement includes a commitment to proceed with strategic plans in Saudi Arabia, such as the establishment of a Saudi joint venture company in the field of engineering and construction.
The engineering and construction sector is second only to the oil sector in respect of its financial contribution to the gross domestic product of Saudi Arabia. Recent studies suggest that the Kingdom plans to spend approximately $15 billion in the construction sector on strategic infrastructure projects this year, which highlights the size of this sector and its importance in creating sustainable economic development.
The agreement was signed by Abdulrahman M. Al-Mofadhi, secretary general of the Public Investment Fund, and senior executive representatives of POSCO and POSCO Engineering and Construction Company, in the presence of representatives of the PIF and other senior executives from POSCO Engineering and Construction Company and the parent company POSCO, during a signing ceremony held at the headquarters of POSCO Engineering & Construction Company in Songdo, Korea, on June 15.
Al-Mofadhi said: "Signing the acquisition agreement is an important achievement that is in line with the Kingdom’s plans and directions to transfer knowledge, expertise and technology into Saudi Arabia. Also, this transaction will lead to the development of projects that would achieve ambitious development goals domestically and enhance the economic status of the Kingdom. Furthermore, the agreement will provide job opportunities for the local work force by creating a strong foundation for the training and development of young Saudis."
Al-Mofadhi added: "The parties commit to the establishment of the joint venture between the PIF and POSCO Engineering and Construction Company in Saudi Arabia, in which PIF will hold a majority stake. This joint venture is likely to add value to the strong trade relations between the Kingdom and South Korea.”
He said the total volume of trade exchange between the two countries reached approximately $46.5 billion in 2013.
Al-Mofadhi noted that the engineering and construction industry is one of the most important factors for economic and social development in the developing countries.
“We are aware of the industry’s strategic importance for the Kingdom and therefore we have planned to invest in this sector in order to respond to the local market needs for specialized engineering and construction services that are comparable with global standards,” he added.
NCB Capital and JP Morgan acted as the financial advisers to the PIF on the transaction.


China's aviation regulator raised concerns with Boeing on 737 MAX design changes

Updated 12 December 2019

China's aviation regulator raised concerns with Boeing on 737 MAX design changes

  • China is reviewing the airworthiness of the plane
  • China was first country to ground plane in March

BEIJING: China’s aviation regulator raised “important concerns” with Boeing Co. on the reliability and security of design changes to the grounded 737 MAX, it said on Thursday, but declined to comment on when the plane might fly again in China.
China is reviewing the airworthiness of the plane based on proposed changes to software and flight control systems according to a bilateral agreement with the United States, Civil Aviation Administration of China (CAAC) spokesman Liu Luxu told reporters at a monthly briefing.
He reiterated that for the plane to resume flights in China, it needed to be re-certified, pilots needed comprehensive and effective training to restore confidence in the model and the causes of two crashes that killed 346 people needed to be investigated with effective measures put in place to prevent another one.
China was the first country to ground the 737 MAX after the second crash in Ethiopia in March and had set up a task force to review design changes to the aircraft that Boeing had submitted.
The US Federal Aviation Administration (FAA) will not allow the 737 MAX to resume flying before the end of 2019, its chief, Steve Dickson, said on Wednesday.
Once the FAA approves the reintroduction into service, the 737 MAX can operate in the United States, but individual regulators could keep the planes grounded in other countries until they complete their own reviews.
“Due to the trade war, the jury is still out on when China would reintroduce the aircraft,” said Rob Morris, Global Head of Consultancy at Ascend by Cirium.
Chinese airlines had 97 737 MAX jets in operation before the global grounding, the most of any country, according to Cirium Fleets Analyzer.