South Korea, Iran sign $1B auto deal

Business Materials 29 May 2016 12:33 (UTC +04:00)

Baku, Azerbaijan, May 29

By Fatih Karimov - Trend:

Iran's second major carmaker Saipa and the South Korean company SK Networks signed a finance deal worth $1 billion, Hassan Baghaei, deputy commercial manager of Saipa said.

Under the deal the South Korean company will provide Saipa car parts worth $1 billion in complete knock-down (CKD), Baghaei said, IRNA news agency reported.

Talks between the two companies on joint venture investment is still underway, he said, adding Saipa is interested in more joint cooperation with SK networks in main areas of car industry.

Saipa has recently placed a $250 million order for purchase of auto parts from South Korean company under the signed finance deal, Baghaei said.

Early in May, during the visit of the South Korean president to Iran, Saipa and the SK Networks signed a memorandum of understanding (MoU) for forming joint venture.
Mehdi Jamali, managing director of the Iranian carmaker expressed hope that the joint venture will be established within one month.

The implementation of this idea is a good investment opportunity which certainly will benefit both parties, Jamali said. He added that Saipa can allocate a certain part of its share in the car market to the joint venture.

Tehran and Seoul signed 19 memoranda of understanding (MoUs) on broadening of mutual economic cooperation during South Korean President Park Geun-hye's visit to Tehran.