For about KRW1tn
Canada’s Brookfield Asset Management, one of the world’s largest alternative investment management companies, is set to acquire industrial gas production facilities from SK Materials Airplus, a subsidiary of SK Inc., within August at the earliest. The acquisition price is known to be around 1 trillion won.
If the deal is completed, Brookfield Asset Management resumes large-scale investment in Korean infrastructure in six years. Market watchers say that the company is promoting the new investment as the sale of the International Financial Center (IFC) in Seoul is nearing. Brookfield is also showing interest in acquiring Iljin Materials, a company that produces elecfoil, a thin copper foil used for cathode collectors in electric vehicle batteries.
In May, SK Materials Airplus chose KKR, a global private equity fund, as a preferred bidder, but as the negotiations between SK and KKR fell apart, Brookfield replaced KKR.
KKR beat Brookfield and Macquarie in a tender for the industrial gas facilities. But it had difficulty raising funds due to soaring interest rates. It began a renegotiation process with SK, but little progress has been made.
KKR has participated in various investment projects offered by SK Group. In November last year, it acquired redeemable convertible preferred stocks (RCPSs) worth 2.4 trillion won issued by SK E&S. It is also considering participating in SK On’s pre-IPO share sale worth 4 to 5 trillion won.
Brookfield is in talks with KB Kookmin Bank and NH Investment & Securities to raise 1 trillion won in advance of inking the final acquisition contract. As for the terms of the acquisition financing, they are in last-minute negotiations over an interest rate of 6 to 7 percent with a loan maturity of seven to eight years. In 2021, KB Kookmin Bank arranged a loan exclusively for the acquisition of SK E&S preferred stocks worth 2.4 trillion won.
Brookfield’s investment in Korea is expected to increase down the road. The Canadian asset management company acquired the IFC on Yeouido of Seoul for 2.55 trillion won in 2016. Recently, Mirae Asset Group decided to acquire the IFC for 4.1 trillion won. If the deal is sealed, Brookfield will earn 1.5 trillion won in investment returns.
Brookfield has recently started to establish the Brookfield Global Transition Fund, which focuses on investment in new and renewable energy. So it is looking for investment targets. Iljin Materials is one of such targets. The copper foil producer's value is estimated at 3 trillion won.