이 기사는 2021년 08월 10일 07시57분 thebell에 표출된 기사입니다

Six or seven private equity (PE) firms, including KKR and IMM Private Equity have shown interest in a sale of two trillion won ($1.9 billion) worth of new preferred shares in SK E&S, South Korea's largest city gas supplier.

PE firms including KKR, IMM Private Equity, Glenwood Private Equity, and EMP Belstar, submitted their letters of intent to participate in the deal, according to industry sources on Friday.

Large buyout funds generally hesitate to invest in deals that include too many shares without management rights because they can’t actively participate in the management by holding a minority stake.

Investing two trillion won to acquire a minority stake in SK E&S is a risk to buyout firms, but market insiders said the deal should be seen as an infrastructure investment instead of an ordinary equity investment via a share issuance.

The energy company has paid stable dividends based on its stable profits. The latest deal is more like a fixed income investment for institutions as they can expect a certain level of return by becoming a shareholder of SK E&S.

Limited partners are more likely to give capital commitments to any PE firm which wins the deal regardless of their portfolio management ability, value-up strategy, or management capability.

From PE firms’ point of view, the investment in SK E&S can provide an opportunity to obtain management fee relatively easily as the company already operates its business stably.

Considering a co-investment project fund has to be formed due to the large investment size, a selected firm can also provide its limited partners a decent investment opportunity while building a strong track record.

SK E&S is likely to select a firm which offers the most attractive terms and conditions among preliminary bidders.

SK E&S is selling the new shares to raise money for its hydrogen and renewable energy business and relevant acquisitions. (Reporting by Ha-na Suh)