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, as 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
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| Ahmed A. Al-Subaey |
, the company said. As a nonexecutive board member, he will also join the management decision-making processes.
“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.
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| Mohammad A. Abunayyan |
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)
