POSCO, South Korea’s top steelmaker, secured a 1.24 trillion won ($1.08 billion) overseas investment Monday by selling stakes in its construction unit to Saudi Arabia’s sovereign wealth fund.
POSCO chairman Kwon Oh-joon inked the deal with the Gulf state’s Public Investment Fund secretary-general Abdulrahman al Mofadhi, selling a 38 percent share in POSCO Engineering and Construction for 1.2 trillion won, according to the company.
POSCO added that it would also collaborate with PIF to establish a Saudi government-run construction firm. The joint venture will build major railroads, hotels and buildings ordered by Saudi Arabia. The company declined to comment on when the joint venture would be established.
“This occasion, on which Korea and Saudi Arabia opened the future together, was possible due to bilateral exchanges that have lasted more than 1,000 years,” Kwon said during the event held at the main office of POSCO E&C in Songdo, Incheon.
The development comes amid the firm’s struggles to shrug off recent controversies involving its executives allegedly creating slush funds and its clash with Daewoo International over the trading arm-owned gas field in Myanmar.