South Korean energy developer SK E&S Co. tapped Thailand’s Electricity Generating Public Company Limited (EGCO) as the preferred bidder for a 49 percent interest in its wholly-owned natural gas power generating unit Paju Energy Service Co. estimated at about 900 billion won ($796.4 million).

According to investment bank industry sources on Sunday, the two parties are in the final stages of negotiations over the sale of a 49 percent stake in Paju Energy Service with an aim to sign a stock sale agreement by the end of this month at the earliest. The deal reportedly is worth over 900 billion won, according to sources.

Paju Energy Service operates a liquefied natural gas (LNG)-fired power with the generation capacity of 1.8-gigawatts in Paju, Gyeonggi Province. The plant started commercial operation in February 2017 and earned 105.5 billion won in operating profit on sales of 906.9 billion won in the first year of operation. In the January-June this year, it earned an operating profit of 105.4 billion won on revenue of 678.9 billion won.

SK E&C has been in negotiations with three contenders EGCO, IGIS PE-Meritz Securities Co. consortium, and Hana Financial Investment Co. to sell a 49 percent out of its full 100 percent stake in Paju Energy Service since August this year. EGCO and IGIS PE-Meritz Securities consortium reportedly matched the sale terms, but SK E&C tilted towards EGCO with any eye for business opportunities in the Southeast Asian country, said an unnamed industry official.

EGCO is Thailand’s first independent, public power producer that generates and sells electricity to government sector and industrial users in Thailand and overseas. Its major shareholders include Japan’s Mitsubishi Corp. and Tokyo Electric Power Company.

Industry watchers expect SK E&C’s stake sale to the EGCO would open the door to new investment opportunities for SK Group companies in Thailand that is seeking to develop its eastern provinces into a leading ASEAN economic zone by investing nearly $43 billion over the next five years.

By Chung Seok-hwan and Cho Jeehyun

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