Ipic resolves Hyundai disputes

Seoul: Hyundai Heavy Industries Co said Wednesday Abu Dhabi-based International Petroleum Investment Co has agreed to accept a Seoul court's decision last month on the right of the shipbuilder to buy a controlling stake in Hyundai Oilbank Corp from Ipic, ending years of legal disputes.

Before the decision by the Seoul Central District Court, the International Chamber of Commerce gave the ruling in November last year that would allow the world's largest shipbuilder by orders to buy a 70 per cent stake in Hyundai Oilbank from Ipic's units-Ipic International and Hanocal Holdings.

Ipic had initially refused to accept the ruling by ICC and the decision by the court to uphold that ruling.

Hyundai Heavy will pay 2.573 trillion won (Dh8.07 billion) in cash to Ipic for 171.56 million shares in South Korea's fourth-largest refiner by output, the company said in a regulatory filing to the Financial Supervisory Service.

"Through the acquisition, we will be able to secure a bridgehead in the energy business and seek synergies with our petrochemical plant business," the company said. After the acquisition, Hyundai Heavy will have a 91.13 per cent stake in Hyundai Oilbank and the remaining 8.87 per cent will be held by other Hyundai shareholders.

Before that, Hyundai Heavy and other shareholders had collectively owned a 30 percent stake in the refiner.

Hanocal and Ipic International had tried to sell 20 to 50 per cent of Hyundai Oilbank's shares in 2007 and early 2008.

Offers

Before inviting proposals from third parties, the two Ipic units had asked Hyundai companies to make offers for Hyundai Oilbank.

Hyundai Heavy and other Hyundai companies have preferred rights to buy a controlling stake in Hyundai Oilbank under an agreement signed in 2008 among the refiner's shareholders.

In March 2008, Hyundai Heavy informed IPIC that it intended to exercise its rights to buy Ipic's shares in Hyundai Oilbank, and began to initiate ICC arbitration in the same month when Ipic stalled on the deal.