SK Ecoplant to inject $100 mn in Korean solar energy firm Topsun

South Korea's top waste management company SK Ecoplant Co., a unit of conglomerate SK Inc., is slated to complete talks to invest 130 billion won ($99.7 million) in local solar energy firm Topsun Co., investment banking sources said on Thursday.  

SK Ecoplant is planning to acquire the shares from existing shareholders. This is an additional acquisition of shares after SK Ecoplant bought a total of 4.36 million convertible bonds for 87.1 billion won, rating 20,000 won per bond, in late May.    

Topsun’s chief executive Yoon Jeong-taek is the largest shareholder of the company, owning a 37.02% stake. If SK Ecoplant converts the CBs to common stocks in the future, the construction firm’s shareholding rate will rise to 39%. The acquisition of existing shares will boost it to more than 40%.

SK Ecoplant said it hasn’t decided yet whether to convert the CBs to stocks.

Founded in 2008, Topsun manufactures solar modules, designs and builds solar power generation systems and operates power plants. The company was listed on the Konex in 2017, a Korean securities exchange for small- and medium-sized enterprises (SMEs) and venture firms prior to listing on the secondary bourse Kosdaq. Topsun posted 142.2 billion won in annual sales and 18.5 billion won in operating profit last year.

Topsun was in the spotlight in January of this year as the company, with Korea South-East Power Co. (KOEN), completed the building and started commercial operations of a 150-megawatt (MW) solar power plant in Sinan County, southwestern Korea. This is the country’s largest solar power capacity plant to date, producing 209.7 gigawatt-hours (GWh) a year – the capacity is equivalent to 49,000 four-person households’ annual electricity consumption. Topsun and KOEN jointly invested 319.6 billion won in the solar power plant project.

SK Ecoplant is set to expand its value chain in the renewables market. In January, the company announced it will jointly invest $200 million with a Vietnamese company in a 250-megawatt rooftop solar power project in the Southeast Asian country.

For a new cash cow in Korea, SK Ecoplant is expected to secure the country’s carbon allowances, the certificates representing rights to emit carbon dioxide, and sell the allowances to companies that need them for businesses. SK Ecoplant is also known to be selling the electricity generated by Topsun’s solar power and energy storage systems.

Formerly known as SK Engineering & Construction (SK E&C), SK Ecoplant was renamed last year to emphasize its eco-friendly construction businesses.

In May of this year, SK Ecoplant signed a share purchase agreement (SPA) with the Malaysian sovereign wealth fund Khazanah Nasional Berhad to buy a 30% stake in Cenviro Sdn Bhd., Malaysia’s first integrated waste management company. At the time, SK Ecoplant was understood to be injecting 100 billion won in Cenviro for 30% of its new shares.

In February, the company acquired a 100% stake in Singapore-based electronic waste recycling company TES Envirocorp Pte. Ltd for $1 billion.

Write to Jun-Ho Cha at chacha@hankyung.com
Jihyun Kim edited this article.