Seoul: A South Korean court has given Hyundai Heavy Industries, the world's largest shipyard, approval to buy Hyundai Oilbank from International Petroleum Investment, backing a ruling in Singapore last year.
Seoul Central District Court accepted Hyundai Heavy's claim to buy 70 per cent of Hyundai Oilbank shares from IPIC, an Abu Dhabi-government investment arm, Judge Chang Jae Yoon said.
The shipyard currently owns 21.13 per cent of the country's smallest refiner.
IPIC said in November 2009 a ruling by the International Chamber of Commerce in Singapore confirming Hyundai Heavy's right to buy Hyundai Oilbank wasn't enforceable in South Korea.
Under an agreement in 1999, shareholders in Hyundai Group, the former parent of Hyundai Heavy, have first priority to buy the stake should IPIC want to sell.
Hyundai Heavy planned to buy the refiner by the end of this month, the company said after the ruling.
IPIC would decide whether to appeal after carefully studying details of the ruling, the United Arab Emirates company said in a separate statement.
The International Chamber of Commerce in Sing-apore said November 12 that IPIC breached a shareholder agreement with Hyundai Heavy and ruled that IPIC should sell its 70 per cent stake in Hyundai Oilbank for 2.57 trillion won ($2.1 billion), based on 15,000 won a share, to Hyundai Heavy.
The Abu Dhabi company said the ruling had no legal effect unless the shipyard obtained a judgment of final enforcement from South Korean courts.
In December, Hyundai Heavy filed a suit in Seoul.
The acquisition, potentially Hyundai Heavy's biggest, would help the company expand its energy business and cut its dependency on building vessels.
Hyundai Heavy fell 0.2 per cent to 252,000 won in Seoul trading.
The stock has advanced 45 per cent this year, compared with a 1.4 per cent gain in the benchmark Kospi index.
IPIC had wanted to reduce its stake in the refiner since 2007.
The company said in April 2008 that Hyundai Heavy failed to make an offer for the shares before inviting bids from third parties.
Hyundai Oilbank has a capacity to process 395,000 barrels a day and is building a 2.1 trillion won unit to expand output of higher-priced fuels. Hyundai Motor Company also holds 4.35 per cent of the refiner and Hyundai Steel 2.21 per cent.
Hyundai Heavy is seeking to raise two trillion won in loans from lenders, including Korea Exchange Bank and Shinhan Bank.
