Saudi Aramco plans to spend $2 billion to buy a stake in Korean refiner S-Oil Corp from Hanjin Energy Co.
S-Oil’s parent company, Korean Air Lines, has faced financial difficulties and sought help from overseas investors.
Hanjin Energy’s board on Wednesday approved the sale plan for its entire 28.4% stake in S-Oil.
State-owned Saudi Aramco is the world’s biggest crude exporter.
It officially announced the purchase plan on July 2.
The sale is set to be completed by August 27 but needs regulatory approval, Hanjin Energy said.
“This transaction underscores Saudi Aramco’s confidence in the Korean economy and its strategy to enhance its presence in the growing Asian markets and [Aramco’s] commitment to S-Oil growth,” Khalid al-Falih, Aramco’s chief executive, said in a statement.
Korean Air, the owner of Hanjin Energy, is trying to raise $3.5 billion to pay back debts, the Wall Street Journal said.
Korean Air and Hanjin “have struggled with deteriorating cash flow and heavy losses because of weak travel demand and overcapacity in the shipping industry,” the Wall Street Journal said.
Saudi Aramco already owns 35 percent of S-Oil and is S-Oil’s biggest shareholder.