SK Innovation and KKR Postpone Decision on Repayment Method for 3 Trillion Won RCPS
Further Negotiations Scheduled for the Second Half Instead of July Notification
Final Adjustments Underway on Cash vs. In-Kind Repayment Options
SK Innovation and the global private equity firm Kohlberg Kravis Roberts (KKR) have reportedly postponed the finalization of the repayment method for their over 3 trillion won redeemable convertible preferred shares (RCPS) to the second half of this year. The two parties had initially planned to determine the repayment method by July 1, but decided to extend the negotiation period and further review whether the repayment will be made in cash or in kind.
According to the investment banking (IB) industry on July 1, SK Innovation and KKR recently signed an agreement to extend the notification deadline for the RCPS repayment method. As a result, the specific method and schedule for the RCPS repayment, which is due this November, are expected to be determined through additional discussions within the year.
The RCPS in question originated from a preferred share investment issued to KKR by SK E&S before its merger with SK Innovation. SK E&S issued RCPS worth 2.4 trillion won in 2021 and 735 billion won in 2023. After SK E&S was merged into SK Innovation in November 2024, the related repayment obligations have since been under review by SK Innovation.
Initially, SK E&S and KKR agreed that the RCPS could be repaid either in cash or in kind. If repayment in kind proceeds, transferring stakes in city gas subsidiaries has been considered the most likely method. The market views this structure as effectively similar to a sale of subsidiaries.
With respect to the 2.4 trillion won RCPS, six city gas companies, including Gangwon City Gas and Kowon Energy Service, are reportedly included as potential in-kind repayment targets. The remaining 735 billion won RCPS is related to Busan City Gas.
Hot Picks Today
"Should Get at Least 45 Million Won Salary" "Can't Give Up on Large Companies"... Young People Say There Are No Places to Apply
- Unemployment Benefits to Drop from 1.98 Million to 1.76 Million Won per Month...Employment Insurance Premium Rate to Rise from 1.8% to 2%
- Packed Crowds with “It’s So Cheap!”... Japan Travel by UK Millennials & Gen Z Surges 25% in a Year
- "Only One Restroom Break per Semester During Class"…Controversy Over Chinese High School Regulations
- When "Cutting Down Reserved Tents" Brings Relief: Local Governments Take Action Against Escalating 'Reserved Tent' Problem
The industry views this extension as a move by SK Innovation to maintain flexibility in determining the repayment method, taking into account its financial burden, subsidiary governance, and room for negotiation with KKR.
© The Asia Business Daily. All rights reserved. Unauthorized AI training and use prohibited.
