Saudi Steel Pipe headquarters in Dammam, Saudi Arabia (File photo by Husteel)
South Korean Husteel Co.’s long-term investments in Saudi Steel Pipe Co. paid off as its share prices surged on deals with the kingdom’s energy giant Aramco.
SSP shares ended up 3% at 67.9 riyal ($18.1) on Sunday on the Saudi Stock Exchange, the highest close since Aug. 1. The stocks have soared 86.3% so far this year.
The jump nearly doubled the value of Husteel’s 16.4% stake in SSP to some 200 billion won ($150.9 million) this year, similar to the South Korean company’s market capitalization of 232.1 billion won, according to industry sources in Seoul on Monday.
Husteel invested only 1.2 billion won in SSP when it was established in 1980 to become its second-largest shareholder. Husteel CEO Park Hoon participates in SSP management as a member of the company’s board of directors.
SSP’s share prices were boosted as it secured supply deals from Aramco. SSP said on Aug. 5 it has won a 138 million riyal contract to supply oil and gas steel pipes to the energy giant. The pipe manufacturer bagged two deals worth 138.6 million riyal each on May 15 and Feb. 6.
KOREA’S NO.2 STEEL PIPE MAKER
Husteel is South Korea’s second-largest steel pipe producer with an annual capacity of 1.1 million tons after SeAH Steel Corp., which manufactures 1.6 million tons a year.
Husteel is a unit of Shinan Group, a construction and golf course conglomerate. It took over Husteel’s control in 2001 when it was under court receivership.
Shinan Chairman Park Soon-seok is Husteel’s top shareholder with a 24.8% stake. His affiliates including the eldest son Park Hoon hold a combined 48.1% stake.
The group acquired local golf courses to become a tycoon in the sector while expanding its businesses into other sectors such as the hotel and resort industry through takeovers.
By Ik-Hwan Kim
lovepen@hankyung.com
Jongwoo Cheon edited this article.
