SK Innovation raised 3 trillion won in funding through two liquefied natural gas (LNG) power generation subsidiaries.
On the 25th, SK Innovation disclosed that its power generation subsidiaries Narae Energy Service and Yeoju Energy Service each decided on a third-party paid-in capital increase. Narae Energy Service operates the Wirye-Hanam combined heat and power plant (CHP), and Yeoju Energy Service is a 100% subsidiary of SK Innovation E&S that operates the Yeoju LNG combined-cycle power plant.
The transaction will be structured so that NexGen Energy No. 1 and No. 2, special purpose companies (SPCs) established by Meritz Financial, which SK Innovation selected as the preferred negotiation partner, will each acquire the convertible preferred shares (CPS) issued by Narae Energy Service and Yeoju Energy Service. By issuing CPS, Narae Energy Service and Yeoju Energy Service will secure 1.65 trillion won and 1.35 trillion won, respectively.
Meritz Financial will be able to convert the CPS into common shares from Apr. 2030 to Oct. 2035. If all CPS issued this time are converted into common shares, it could secure 50.1% equity in both Narae Energy Service and Yeoju Energy Service.
Of the 3 trillion won raised this time, SK Innovation plans to allocate 2.41 trillion won, excluding the funds to be used for repayment of borrowing fund and other purposes at Narae Energy Service and Yeoju Energy Service, to strengthen its financial soundness. SK Innovation held a strategy briefing to enhance corporate value in Jul. and said it would raise 8 trillion won in capital within the year.
An SK Innovation official said, "This fundraising was carried out to strengthen financial soundness at the companywide level of SK Innovation," and added, "We plan to continue to retain management control and business operation rights of the power generation subsidiaries and steadily strengthen competitiveness across the LNG value chain."