Hyundai Oilbank cancels initial public offering
Hyundai Oilbank Co., Ltd., a subsidiary of Hyundai Heavy Industries Holdings Co., Ltd., withdrew its plan for an initial public offering (IPO), citing the current challenging market conditions. The disclosure was made following a board decision on July 20.
The board decided to list the company’s shares on June 14, 2021. Since then, the Korea Composite Stock Price Index (KOSPI), the index of all common stocks traded on the Stock Market Division—previously, Korea Stock Exchange—of the Korea Exchange, has dropped by more than 25%
Hyundai Oilbank, which has a 650,000 barrel-per-day (bpd) crude oil refining capacity in Daesan-eup, Seosan, Chungnam, is South Korea’s smallest oil refiner. It also has a joint venture lube base oil refinery with Shell called Hyundai Shell Base Oil. The joint venture has an annual production capacity of 1,000,000 tons and produces Group Ⅱ 70 Neutral, Group Ⅱ 150 Neutral, and Group Ⅱ 500 Neutral.
In addition, Hyundai Oilbank operates 2,400 service stations and charging stations in South Korea.
In December 2019, Saudi Aramco paid USD1.2 billion to acquire a 17% stake in Hyundai Oilbank as Saudi Arabia’s national oil company sought to expand its downstream assets globally. It is also the majority stakeholder in South Korea’s third-largest oil refiner, S-Oil Corp., which has a crude oil refining capacity of 669,000 bpd in Ulsan. The transaction made Saudi Aramco the second-largest shareholder in Hyundai Oilbank, after Hyundai Heavy Industries Holdings, one of the world’s leading heavy industries companies, with a 73.9% stake.
Hyundai Heavy Industries plans to sell a controlling stake in Hyundai Oilbank as it wants to streamline its portfolio and focus on businesses with higher growth potential such as shipbuilding, offshore and heavy equipment. The group also owns Hyundai Merchant Marine Co., South Korea’s second-biggest shipping line.
Hyundai Oilbank reported record earnings last year with an operating profit of KRW1.1 trillion (USD839.5 million) on sales of KRW20.6 trillion (USD15.7 billion) on a consolidated basis. In the first quarter of 2022, it posted KRW704.5 billion (USD537.7 million) in profits based on revenues of KRW7.2 trillion (USD5.5 billion).