SK E&S to buy full ownership in Busan City Gas at premium to delist it later

SK E&S Co., energy unit of South Korea’s SK Group, will voluntarily delist its unit Busan City Gas Co. instrumental in its hydrogen migration after purchasing remaining shares at a premium of more than 40 percent for more efficient management in energy sourcing and distribution.

SK E&S said in a disclosure Thursday that it will openly purchase 2,595,597 shares of Busan City Gas, or 23.6 percent of outstanding shares trading on the Kospi, at 85,000 won apiece. The purchase will be made until October 15.

SK E&S currently owns 67.32 percent of Busan City Gas shares. The tender offer will allow the company to own 90.92 percent of the affiliate’s shares excluding 9.08 percent of Busan City Gas own shares.

The purchase price has been given a premium of 40.62 percent than the market price to protect investors.

Shares of Busan City Gas closed 29.94 percent higher at 80,300 won on Thursday.

SK E&S said that incorporating Busan City Gas as a fully-owned subsidiary will help create synergy in future green energy businesses. Busan City Gas has been actively engaged in carrying out new projects related to hydrogen charging stations and fuel cell energy.

SK E&S plans to delist Busan City Gas after stake acquisition. Under the country’s law, the largest shareholder can apply for volunteering delisting of a company if it owns over 95 percent of total issued shares.

SK E&S said that the tender offer will help enhance management flexibility of Busan City Gas and growth as a comprehensive energy company.

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