SK Innovation Co.’s sale of its 50% stake in Boryeong LNG Terminal has drawn strong interest from domestic and international private equity funds (PEFs), setting the stage for a competitive auction in one of South Korea’s largest recent infrastructure transactions.
According to investment banking industry sources on Friday, about 10 bidders, including IMM Investment, Macquarie Asset Management, Stonebridge Capital and I Squared Capital, submitted offers in the preliminary round that closed on Thursday.
Standard Chartered is advising SK Innovation on the deal, which is expected to result in a signed sale and purchase agreement before year-end.
Boryeong LNG Terminal (Screenshot captured from its website) JV BETWEEN SK, GS ENERGY
The terminal, a joint venture between SK E&S Co. and GS Energy Co. established in 2013, stores imported liquefied natural gas before regasifying and supplying it to power plants and petrochemical producers.
Last year, it generated 256 billion won ($184 million) in revenue and 94 billion won in operating profit, with annual earnings before interest, tax, depreciation and amortization (EBITDA) of about 200 billion won.
The company’s enterprise value is estimated at up to 2 trillion won, bankers said.
After accounting for debt, however, SK Innovation is expected to net between 300 billion won and 400 billion won from the sale of its 50% stake.
Boryeong LNG Terminal (Screenshot captured from its website) GS ENERGY PLAYS A CRUCIAL ROLE
Market watchers said GS Energy, which owns the other 50% stake in Boryeong LNG Terminal, holds a crucial role in the sale process.
SK Innovation’s affiliates are expected to continue using the facility after the sale, meaning the group cannot ignore GS’ role.
GS is known to be hoping to exert a greater role in selecting the buyer, and may seek to acquire part of the stake from the eventual financial investor to strengthen its control over the terminal operations.
Investment banking sources said the auction underscores PEFs’ growing appetite for Korean energy infrastructure assets, particularly those with stable, long-term cash flows – even as the LNG market faces growing uncertainty over future demand and energy transition policies.
Write to Jong-Kwan Park at pjk@hankyung.com In-Soo Nam edited this article.
