이 기사는 2021년 07월 21일 07:56 thebell 에 표출된 기사입니다.

Hyundai Oilbank, a refining subsidiary of Hyundai Heavy Industries Holdings, has raised cash to invest in future growth drivers focused on clean energy.

The company’s board of directors on Friday approved a sale of a 90% stake in the oil storage business, Hyundai Oil Terminal, to J& Private Equity for 180 billion won ($156.5 million), according to a regulatory filing. The transaction is expected to close on August 31.

The sale is in line with restructuring efforts by its parent company to shift its business focus to eco-friendly areas, industry watchers said.

In March this year, Hyundai Oilbank announced Vision 2030 to reduce its revenue reliance on the refining business from the current 85% to 45% and instead increase an operating profit from future growth drivers – including white biotechnology, eco-friendly chemical materials and low-carbon blue hydrogen – to 70% of the total by 2030.

Hyundai Oil Terminal was the company’s lucrative subsidiary with an annual net profit margin of around 20%. It reported revenue of 45.2 billion won and net profit of 10.9 billion won in 2020. The filing said that the proceeds from the sale will go toward investments in new business opportunities.

The deal marks the first asset sale by the company in nearly a decade. Hyundai Oilbank, one of the major oil refiners in South Korea, has so far focused on expansion. It established joint ventures with Lotte Chemical and carbon black company OCI in 2016 and in 2018, respectively, and acquired SK Networks’ gas station assets last year.

Heavy investments, combined with cyclical fluctuations, resulted in large cash outflows. Hyundai Oilbank had cash, cash equivalents and short-term investments of 47 billion won on a non-consolidated basis at the end of March, down from 76 billion won at the end of 2020.

In contrast, the company’s borrowings slightly increased from 3.58 trillion won to 3.98 trillion won in the same period. Given its weakened financial position, Hyundai Oilbank may increasingly focus on raising cash going forward.

Some observers expect Hyundai Oilbank’s planned initial public offering will largely consist of a fresh issue of shares, rather than a sale by existing shareholders. The refiner is currently 74% owned by Hyundai Heavy Industries Holdings.

“When Hyundai Oilbank first attempted to go public in 2018, the focus was to solve the liquidity issue for Hyundai Heavy Industries Holdings,” said an industry insider.

“That issue was solved after Hyundai Heavy Industries Holdings sold a partial stake in Hyundai Oilbank to Saudi Aramco in 2019, and now Hyundai Oilbank is in need of cash.”

Hyundai Oilbank recently issued a request for proposals to pick underwriters, with a target of listing on Kospi in the first half of 2022.

“No details have been finalized yet,” a representative for Hyundai Heavy Industries Group said regarding Hyundai Oilbank’s IPO. (Reporting by Ki-soo Park)