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Public Investment Fund, a sovereign fund of Saudi Arabia, will have a say in the management of POSCO Engineering & Construction by securing two seats on its six-member corporate board.
The builder said Wednesday it appointed two board members recommended by the Saudi fund, the firm’s second-largest shareholder.
PIF purchased a 38 percent stake in POSCO E&C, the construction arm of POSCO, for 1.24 trillion won ($1.08 billion) in June this year in its efforts to secure international vendors for infrastructure projects.
One of them is Saudi Aramco’s executive director Ahmed A. Al-Subaey who served S-Oil as CEO between 2008 and 2012. He will take an advisory role for top management of POSCO E&C as the firm’s vice president and a standing board member, while maintaining his status at Saudi Aramco.
“The company expects Al-Subey, who proved his leadership skills at a major Korean refinery and raised the understanding of Korea and Korean culture, will be able to play a bridging role between POSCO E&C and PIF,” a company official said.
The other board member is ACWA Power chairman
“With the new governance structure and board, the company will invest in advancing management system in accordance with global standards,” the builder said in a press release.
Regarding the business aspects, industry watchers said the new board is likely to step up plans to establish a joint venture focusing on a series of infrastructure projects including a railway, hotel and other construction projects undertaken by the Saudi Arabian government. The oil-producing nation has been trying to foster local manufacturing industries in preparation for the post-oil era.
By Seo Jee-yeon (jyseo@heraldcorp.com)
