State-owned Saudi Aramco plans to buy a stake of up to 19.9 percent of South Korean refiner Hyundai Oilbank from Hyundai Heavy Industries Holdings , for 1.8 trillion won ($1.61 billion), driving up shares of the parent 6.6 percent.

South Korea is a major market for Saudi Aramco, the biggest shareholder of its No.3 refiner, S-Oil Corp. The deal should help Aramco boost sales of crude to Hyundai Oilbank, the South's smallest refiner by capacity.

Its parent, which now owns 91.13 percent of Hyundai Oilbank, said it planned to “reconsider” the stock market listing of the refinery arm after completing the stake sale, possibly this year.

Saudi Aramco plans to value Hyundai Oilbank at 10 trillion won, or 36,000 won per share, the parent firm said in a statement.

A person familiar with the matter said the company plans to offer a discount of 10 percent to Saudi Aramco in a block deal that will require board approval from both firms.

“Hyundai Heavy is selling the stake at a good price,” said Yoon Tae-ho, an analyst at Korea Investment & Securities, adding that the valuation was higher than the market expected.

Hyundai Oilbank, which had aimed to list on South Korea's stock exchange last year, delayed the plan until this year because of regulatory scrutiny of its balance sheet.

The holding company of shipbuilder Hyundai Heavy Industries said it would use the funds from the deal to invest in new businesses and improve its financial health.

The shipbuilder is part of a joint venture with Saudi Aramco and others to build a shipyard on Saudi Arabia’s eastern coast.

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