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M&A financing

Shinhan, Hana fund KKR’s $5.6 bn UK deal with $63 mn in loans

Dec 04, 2020 (Gmt+09:00)

(Courtesy of Getty Images Bank)


Two leading South Korean banks – Shinhan and Hana – have provided a combined 47 million pounds ($63 million) in senior loans to finance KKR & Co.’s 4.2 billion pound ($5.6 billion) acquisition of a UK waste management company, Shinhan said on Dec. 4.

Shinhan declined to identify the acquired firm. But in March, KKR agreed to buy UK waste management firm Viridor in a 4.2-billion-pound all-cash deal. It was one of the largest acquisition deals since the coronavirus struck.

“For the deal, debt accounted for more than half the financing. We participated in the senior loan package,” Shinhan Financial Group, parent of the bank, told The Korea Economic Daily in a written interview.

“Shinhan Bank provided 25 million pounds and Hana Bank 22 million pounds in senior loans.”

The investment was spearheaded by Shinhan Financial Group’s global investment banking (GIB) desk in London. The team was set up by the group’s banking, brokerage, life insurance and non-banking financing arms in January 2019 to push for global operations.

“From the early stages of KKR signing the deal, we worked together with KKR’s deal sourcing team in London and directly shared high-quality information in the process of forming the syndicate group,” said Shinhan Financial.

“In particular, we were able to conduct due diligence by taking advantage of our relationships with KKR, even where it was almost impossible to do on-site due diligence due to the coronavirus outbreak.”

Shinhan will not sell down the debt investment deemed as a prime infrastructure asset, although classifying it among sell-down candidates, depending on its liquidity conditions.

The investment came after Shinhan Financial Group and Hana Financial Group signed a cooperation agreement in May for global investment banking business.

For their first co-investment, both banking groups participated in a $1 billion syndicate loan to African Export-Import Bank in August.

Shinhan runs GIB desks in New York, Hong Kong and Sydney in Australia, as well. This year, its GIB teams as a whole led the group’s $240 million investments in Europe, the Middle East and Africa. 

It plans to expand its European investment banking business beyond western Europe and beyond infrastructure, Shinhan added.

Write to Daehun Kim at daepun@hankyung.com

Yeonhee Kim edited this article.

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