South Korean steelmaker Posco is considering selling part of a stake in its construction unit Posco Engineering & Construction (Posco E&C) to an unidentified Saudi Arabian fund in a deal worth nearly 1 trillion won ($966.28 million), said a senior official.

"The fund proposed the sale to help Posco E&C expand in Saudi Arabia," the official told Reuters on condition of anonymity because the matter is confidential.

The South Korean firm plans to sell about 30 to 40 per cent stake in the construction unit to the unnamed Saudi Arabian sovereign wealth fund, local newspaper Korea Economic Daily reported, citing unnamed investment banking sources.

The move comes as Posco E&C, in which the South Korean firm holds a 89.53 per cent stake, plans to go public as part of the steelmaker's efforts to bolster its balance sheet.-Reuters