À̹ÌÁö È®´ë [Photo provided by SK E&S Co.]
SK E&S Co. is set to raise 2 trillion won ($1.7 billion) in new capital through issues of redeemable convertible preferred shares as shortlisted candidates all eagerly subscribed to the offering.
The candidates, eligible to become the second largest shareholder of the country¡¯s biggest private city gas supplier and clean energy flagship of SK Group eying to transform its mainstay from gas to hydrogen and other renewables, are Kohlberg Kravis Roberts & Co. (KKR), IMM Private Equity, Glenwood Private Equity, and EMP Belstar, according to industry sources. They had been shortlisted from a preliminary tender held last month.
SK E&S plans to pick a preferred bidder by early November to raise funds within the year.
Redeemable convertible preferred stock allows the issuer to buy it back at a specific price and gives the buyer an option to convert the shares into a fixed number of common shares after a pre-determined date. If the SK E&S¡¯s dividend-paying preferred shares are converted to common shares, the owner becomes the second largest shareholder in the company.
SK E&S is selling the shares to fund its renewable energy projects. Playing a central role in SK Group¡¯s plan to bump up the group¡¯s hydrogen energy production capacity to 280,000 tons by 2025, SK E&S aims to build the world¡¯s largest hydrogen liquefaction plant within its sister SK Incheon Petrochem Co.¡¯s manufacturing base by 2023.
The four bidders all have outlined big business plans for the company as a strategic partner.
KKR is said to have proposed to back SK E&S in its efforts to grow the company¡¯s renewable energy business at the global level, while IMM Private Equity has offered a deal for stable returns.
Some of the bidders reportedly are demanding the company to include an option to receive shares in SK E&S¡¯s city gas subsidiaries instead of cash when redeeming their investment.
SK E&S is the largest city gas supplier in Korea with seven subsidiaries. Its city gas division is estimated to be worth 3 trillion won in total.
SK E&S is unlisted and controlled by SK Group¡¯s holding entity SK Inc. The company earned 5.7 trillion won in revenue last year with nearly half generated by the city gas business.
By Park Chang-young, Kang Woo-seok and Cho Jeehyun
[¨Ï Pulse by Maeil Business Newspaper & mk.co.kr, All rights reserved]