Leading international investment business KKR disclosed that KKR and South Korean energy company SK E&S had reached an agreement for KKR to purchase the newly issued redeemable convertible preferred shares ("RCPS").
Following a first investment in November 2021, this deal represents KKR's second investment in SK E&S through the purchase of newly issued RCPS. SK E&S has utilised the first investment to propel its expansion and transformation into a leading provider of global clean energy solutions. In order to de-lever and take advantage of post-pandemic prospects in the energy and renewable asset sectors, SK E&S claims that it is currently seeking to secure cash.
Keith Kim, a Managing Director on KKR’s Infrastructure team, said, “We are pleased to extend our collaboration with SK E&S and support its mission-critical diversification into renewable energy solutions both within and outside of Korea. We are also excited to deepen our existing relationship with SK Group, and believe that this transaction is highly aligned with KKR’s broader strategy to create tailored solutions to support the corporate objectives of Korean enterprises.”
SK E&S was founded in 1999 and is a part of the SK Group, one of the biggest businesses in South Korea. In addition to downstream instreams like power production, district energy, and city gas, SK E&S also engages in upstream activities like developing overseas gas fields. By concentrating on hydrogen as well as renewable energy and related energy solutions, SK E&S today seeks to further its aim to accelerate its growth to become a leading global provider of clean energy solutions.
In order to support infrastructure assets and companies with growth potential throughout developed and growing Asian markets, including South Korea, India, the Philippines, Japan, Australia, New Zealand, and China, KKR makes its investment through its Asia Pacific infrastructure strategy. The investment in SK E&S also represents KKR's most recent venture into the renewable energy market and South Korea. Since 2011, KKR has invested more than US$15 billion in equity across the globe in renewable assets like solar and wind, which as of December 31, 2021, would have an operational power generation capacity of 23 GW. Renewable energy sources are central to KKR's infrastructure strategy in Asia Pacific, and the company aims to participate in the enormous prospects present there.
In addition, the deal represents KKR's most recent investment in South Korea and continues its history as a prodigious investor in a variety of asset classes, including infrastructure, private equity, real estate, and credit.