SK E&S Pulls Out of HK-listed China Gas After Selling 10% Stake for $1.5 Bn

Source Press
Company SK Corporation 
Tags Corporate Deals, Deals, Pipelines/ tankers/ distribution, Refining & Marketing Activities
Date April 17, 2020

() SK E&S, the clean energy & solution subsidiary of South Korea’s third largest conglomerate SK Group, sold off nearly all of its equity holding in Hong Kong-listed China Gas Holdings Ltd. for 1.8 trillion won ($1.47 billion) as part of efforts to shore up its financial health and secure funds for future growth.

The company in its disclosure on Friday announced that it divested 535 million shares or nearly 10 percent in China Gas Holdings for 1.8 trillion won at a discount of 11.11 percent from Thursday’s closing rate of 24.3 Hong Kong dollars (3,814 won or $3.14) in the block trade.

Citigroup Global Markets Korea Securities and Credit Suisse tapped institutional demand on the offering after trading hours on Thursday (local time).

The sale marks the biggest after-hour block deal by a Korean company.

SK E&S had unloaded about 3 percent in the Hong Kong-listed company in September last year. SK E&S retains 75,874,000 shares or 1.45 percent in China Gas Holdings after the latest divesture.

China Gas Holdings is a natural gas service provider engaged in investment, construction and management of city gas pipeline infrastructure. The company is listed on the Hong Kong Stock Exchange and has been expanding fast on Beijing’s campaign that favors cleaner natural gas over coal.

The latest cash-out is to improve the balance sheet and secure financial ammunition for future M&As and other investment for new growth, the Korean company said. SK E&S earlier received a credit rating of BBB with negative outlook from S&P Global Ratings, which is a warning that its debt rating could be revised down from current BBB if it fails to improve the financial status in a year.

Market analysts expect SK E&S will actively seek for M&A opportunities with the proceeds. The company recently has turned aggressive in M&As and acquired a 25 percent stake in Australia’s Darwin LNG project for $389 million from Australian LNG player Santos in March.

Shares of SK Holdings., its parent company and SK Group’s holding entity, rose 4.71 percent to close Friday at 189,000 won in Seoul.

Source: EvaluateEnergy® ©2022 EvaluateEnergy Ltd