Skip to content
  • KOSPI 2713.70 -6.69 -0.25%
  • KOSDAQ 892.51 +3.07 +0.35%
  • KOSPI200 361.39 -1.00 -0.28%
  • USD/KRW 1197.8 3.60 0.30%
  • JPY100/KRW 1,051.62 4.12 0.39%
  • EUR/KRW 1,353.87 1.20 0.09%
  • CNH/KRW 189.1 0.67 0.35%
View Market Snapshot
Capital raising

KKR, IMM PE in bid for SK E&S' $2 bn preferred shares

Seven PEFs submit letters of intent to buy the new shares

By Aug 04, 2021 (Gmt+09:00)

KKR, IMM PE in bid for SK E&S'  bn preferred shares
KKR & Co., IMM Private Equity and Glenwood Private Equity are among the preliminary bidders for 2 trillion won ($1.9 billion) worth of new preferred shares in SK E&S Co., South Korea's largest city gas supplier.

SK E&S, 90% owned by its holding company SK Inc., is selling the new shares to raise money for its hydrogen and renewable energy business and relevant acquisitions, according to investment banking sources on Wednesday.

By the Aug. 4 deadline, seven private equity firms, keen on energy infrastructure, have submitted letters of intent to buy the shares convertible into common shares, or redeemable for cash. Credit Suisse and Bank of America Merrill Lynch are handling the share sale.

Another bidder EMP Belstar brought in MG Korean Federation of Community Credit Cooperatives and MiraeN Co., the country's leading publisher of school textbooks, as its key limited partners.

SK E&S will shortlist them around next week. Given the strong interest, SK E&S will likely pick investors proposing the highest valuation and favorable investment terms.

The preferred share buyers reportedly will be granted an option to invest in SK E&S city gas subsidiaries which have grabbed investors' attention because of their long-term and stable cash flow, as well as the industry's high entry barriers. 

SK E&S runs seven city gas units based in provinces, including Gangwon Province and North Jeolla Province. 

The company also plans to use the proceeds to reduce its debt-to-equity ratio. The gearing ratio swelled to 186% at the end of last year from the previous year's 152% on a consolidated basis, following its investments in LNG and other energy projects.

This year, SK E&S is expected to report 262.7 billion won in operating profit on sales of 5.8 trillion won, along with 625.3 billion won in EBITDA.

As part of the parent SK Group's efforts to make a transition to an eco-friendly energy company, SK E&S and its holding company SK Inc. had jointly acquired around a 10% stake in US hydrogen fuel cell maker Plug Power Inc. for $1.6 billion in February of this year.

Plug Power produces hydrogen fuel cells for vehicles, and builds liquefied hydrogen plants and hydrogen charging stations.

(Updated on Aug. 5 to add EMP Belstar as a preliminary bidder)

Write to Chae-yeon Kim at

Yeonhee Kim edited this article.
Comment 0