The South Korean contractor will target hotel and rail work in Saudi Arabia
- Saudi fund completes Posco E&C acquisition
- The $1.1bn deal was signed in June
- Company will target rail and hotel projects in Saudi Arabia
Saudi Arabias Public Investment Fund (PIF) has completed a $1.1bn deal to acquire a 38 per cent stake in South Koreas Posco Engineering & Construction (Posco E&C).
Posco will remain the majority shareholder, with a 52.8 per cent stake.
Posco E&C had net assets of 2,972bn won ($2.7bn) at the end of 2014, but a high debt burden.
Posco is said to be unloading assets to focus on its core business and cope with the steel market downturn.
The sovereign wealth fund and Posco plan to establish a joint venture to carry out infrastructure projects in Saudi Arabia. They will focus on rail and hotel schemes.
The deal has been delayed by corruption allegations at Posco E&C. Prosecutors investigated Posco and several subsidiaries including Posco E&C over alleged $9bn slush funds and political corruption earlier in 2015, according to local press.
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