IMM Investment and a consortium of Stick Alternative Asset Management-Korea Investment PE joined SK Group's ongoing sale of minority stakes in SK Multi Utilities (SK MU) and Ulsan GPS.
According to the investment banking (IB) industry on the 14th, SK Gas and SK Chemicals held the main bid the same day for the sale of minority stakes in SK MU and Ulsan GPS. KKR, which wants to acquire the Ulsan AI data center equity as part of a package in addition to the minority stakes in the two companies, was also said to have participated in the bid.
Ulsan GPS and SK MU are power generation companies located in the Ulsan Mipo National Industrial Complex. SK Group has been proceeding since the end of last year to sell up to 49% equity in each of the two companies. There was an outlook that the two companies are worth 2 trillion won and the sale price for the equity would reach 1 trillion won.
The transaction is a simple structure in which an investor acquires a minority stake in the form of common shares. The industry believes all three bidders likely offered the price SK Group wants. Despite the absence of safeguards to cap downside risk, they were all said to have proposed prices above 1 trillion won.
SK Group is said to have provided no downside protection for financial investors (FI), such as qualified IPO (Q-IPO), put options, or drag-along rights. Investors will have to seek their own exit strategies going forward. On top of that, SK MU has project financing (PF) exceeding 1 trillion won that takes priority, pushing FI acquisition financing to a subordinated position.