Mirae Asset to offer $425 mn in equity, debt funding for US desalination plant

Mirae Asset Global Investments Co. Ltd. will provide $425 million in equity and debt financing for the acquisition of a desalination plant in San Diego by an affiliate of Aberdeen Standard Investments, according to sources with knowledge of the matter.

The unit of Scotland-based Aberdeen agreed in May to buy the Claude “Bud” Lewis Carlsbad Desalination Plant reportedly for more than $1 billion.

As an equity investor, Mirae Asset will provide $175 million to fund the acquisition.

The equity investment was sold down in a 20-year vehicle for a target IRR of a net 6.90% before currency hedging to the Korean Teachers’ Credit Union (KTCU) for $130 million; Hanwha General Insurance Co. Ltd. for $30 million; and the KTCU’s funeral service providing arm Yedaham for $15 million.

It was first reported by the Financial News, a domestic news provider, on Oct. 16 and confirmed by the sources.

For det financing, Mirae Asset will lend a $225 million loan and sell it down to domestic investors via Seoul-based PineStreet Asset Management Co. Ltd.

No further details on the loan were immediately available.

Hana Financial Investment Co. Ltd. and NH Investment & Securities Co. Ltd. arranged and underwrote both the equity and loan investment for Mirae Asset.

The desalination plant in Carlsbad was developed as a public and private partnership and opened in December 2015.

It separates salt from seawater and delivers nearly 50 million gallons of desalinated water per day, accounting for about one-third of all water generated in San Diego County.

Its operator signed a 30-year supply agreement with the San Diego County Water Authority in 2012 when the construction on the facility began.

By Hyun-il Lee

hiuneal@hankyung.com

(Photo: Getty Images Bank)