News Code: 2980

Date of Release: 2018-10-30

Hyundai Abandons $520m Iran Petrochem Project

Hyundai Engineering & Construction Company announced on Monday that it has scrapped a $520 million deal with Iran’s Ahdaf Investment Company to build the second phase of Kangan Petro Refining Complex — a major petrochemical and refinery project in southern Bushehr Province. The figure accounts for 3.09% of Hyundai E&C’s consolidated sales in 2015. According […]

Hyundai Engineering & Construction Company announced on Monday that it has scrapped a $520 million deal with Iran’s Ahdaf Investment Company to build the second phase of Kangan Petro Refining Complex — a major petrochemical and refinery project in southern Bushehr Province.

The figure accounts for 3.09% of Hyundai E&C’s consolidated sales in 2015.

According to businesskorea.co.kr, in March 2017, Hyundai Engineering Company and Hyundai E&C jointly won the deal from Ahdaf, a subsidiary of Iran’s Oil Pension Fund Investment Co.

It was the largest single deal forged by domestic companies in Iran but ended up in cancellation.

The industry believes that the Iranian company abandoned the deal as its ability to fund it had been hit by the prospect of US economic sanctions against Tehran.

In general, a client pays 15% of construction costs in advance and raises finance for the rest. However, the deal is off as Ahdaf is having trouble financing.

An official from the construction industry said, “The companies have not suffered a loss at the moment because they haven’t put money into construction yet. However, they must be devastated internally over the drop in order backlog.”

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