Global investment banking firm Goldman Sachs Group Inc. has joined the heated race after a controlling stake in South Korea’s top animal fat feedstock company Daekyung Oil & Transportation Co. (Daekyung O&T) on burgeoning demand for biodiesel business amid global fuel instability.

According to multiple sources from the investment bank industry on Tuesday, Goldman Sachs Principal Investment Area (PIA) had submitted a preliminary bid for a controlling stake in Daekyung O&T.

It joins a high-profile short list Bank of America Securities Inc. has compiled that also includes SK Energy, Mirae Asset Venture Investment, Eugene Private Equity, and IMM Investment.

They vie for Daekyung O&T’s entire stake – including those owned by STIC Investments and former Daekyung O&T CEO Kim Chang-yoon.

A final bid will take place in mid-December. The sale price is estimated at about 500 billion won ($422.5 million).

Goldman Sachs PIA is direct investment unit of Goldman Sachs that traditionally focuses on private equity fund investment. In Korea, the company has previously invested in KB Kookmin Bank, C&M, Hana Bank, and Daesung Industrial Gases. It also participated in pre-initial public offering (IPO) of GP Club that is seeking to go public next year.

Goldman Sachs PIA has eyes on the growth potential of Daekyung O&T’s engine biodiesel. The contenders that were shortlisted last month have had interviews in turn with the management where they ask about questionable areas in digital files whereas the seller tries to confirm candidates’ sincerity over the sale.

The contenders meanwhile are building winning strategies.

SK Energy and Eugene PE teamed up to raise their chances. Mirae Asset Venture Investment is titled towards dropping out as it has failed to bring on a refiner as a strategic partner.

IMM Investment is deliberating its chances.

Daekyung O&T – founded in 1995 –manufactures and sells vegetable and animal oil fats. Under STIC Investments as major shareholder four years ago, Daekyung O&T has expanded into biodiesel business that engages in waste edible oil, slaughtered by-products, and vegetable oil.

The business has been gaining growing attention amid focus on environmental, sustainable and corporate governance (ESG).

Daekyung O&T accounts for 50 percent of biodiesel market. The company raised 16.5 billion won in operating income in 2020, up 300 percent from the previous year, on sales of 331.4 billion won, up 28 percent.

By Kang Woo-seok and Lee Eun-joo

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