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Capital raising

SK E&S' $2 bn preferred share deal shortlisted to four candidates

KKR, IMM PE, IMM Investment and EMP Belstar will conduct due diligence on SK E&S assets over the next month

By Aug 13, 2021 (Gmt+09:00)

SK’s petrochemical complex in Incheon, where SK E&S liquid hydrogen plant will be located.
SK’s petrochemical complex in Incheon, where SK E&S liquid hydrogen plant will be located.

SK E&S Co., the largest city gas supplier in South Korea, has shortlisted four candidates among seven preliminary bidders to invest in 2 trillion won ($1.7 billion) worth of its new preferred shares.

SK E&S said on Aug. 13 that the selected four companies -- KKR & Co., IMM Private Equity, IMM Investment Corp. and EMP Belstar -- will conduct due diligence on its key assets over a month before making the final selection of the preferred bidder within September. The scope of the due diligence will include the energy supplier’s liquefied natural gas (LNG) plant, renewable energy infrastructure as well as city gas facilities.

After its selection of the final bidder in September, SK E&S will complete issuing the preferred shares and raise money accordingly within this year. The preferred shares typically can be convertible into common shares or redeemable for cash.

SK E&S said that it will have the final say in devising the specific agreement terms regarding the conversion of the preferred shares to common shares or their redemption into cash.

SK E&S said it will be using the new funds in expanding its hydrogen as well as other renewable energy businesses such as low-carbon LNG.

“We will be reshuffling our business portfolio with a focus on renewable energies. Profitability will also be at the center of our long-term strategy,” said an SK E&S representative.

Write to Chae-yeon Kim at why29@hankyung.com

Daniel Cho edited this article.

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