Abu Dhabi is to sell its $2.2bn 70 percent stake in a South Korean refinery following the loss of a legal battle with Hyundai Heavy Industries, it was reported on Wednesday.
International Petroleum Investment Company (IPIC), the government-owned state body responsible for Abu Dhabi’s foreign oil and chemical investments, is to sell its stake in Hyundai Oilbank, South Korea’s fourth-largest refiner, according to a report in The National newspaper.
IPIC is to sell its 70 percent stake to Hyundai Heavy Industries (HHI), bringing HHI’s overall stake to 91.1 percent, according to a regulatory filing lodged on Wednesday with the Korea Financial Supervisory Service.
Last year, following an international arbitration case at the Paris-based International Chamber of Commerce, IPIC was ordered to sell its stake to HHI. IPIC refused but a Seoul court last month ordered it to do so.
In 1999, IPIC bought half of Hyundai Oilbank and increased its stake to 70 percent in 2006. The following year, it attempted to sell half its stake to GS Group, HHI’s rival.
HHI objected to this and this led to the legal battle, which ultimately has now ruled against IPIC’s favour.
“I wouldn’t see this as a massive loss for IPIC,” Tom Grieder, an east Asian energy analyst at IHS Global Insight, told The National, adding that he believes that IPIC may use the money to invest in the Chinese market.
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