Two-way race for Korean recycling giant EMK as deal loses appeal

The heated tender for Eco Management Korea (EMK), a waste managing and recycling provider with 11 waste incinerators across South Korea, has become a two-way race.

According to the investment banking industry on Sunday, Korea’s water treatment firm Ecorbit Engineering and Singapore-based Keppel Infrastructure Trust handed in their letters of intent (LOI) for the main tender.

The preliminary tender drew 10 bidders.

Ecorbit is advised by Samsung Securities, and Keppel is represented by Standard Chartered Securities.

They are vying for EMK’s controlling stake held by IMM Investment and Korea Development Bank (KDB). The stake was initially estimated at 1 trillion won ($770.89 million). However, the price would likely go down to 600~700 billion won as EMK’s affiliate Shindaehan Refined Fuel was excluded from the deal as the company was recently recapitalized for facility expansion.

The preferred bidder is expected to be selected before the end of this month.

EMK was established in 2010 by merging the country’s six waste treatment companies, including Dana Energy Solutions, Shindaehan Refined Fuel, and Korean Environment Development. The companies collect and incinerate waste from households and factories in their districts. They make profits by supplying steam and heat generated in the waste treatment process.

Ecorbit, a local environmental firm covering water treatment and waste recycling, is 50 percent owned by TY Holdings, with the remaining held by its strategic investor KKR &Co. Keppel Infrastructure Trust, founded in 2007, invests in infrastructure assets. Its largest shareholder is Temasek, a state-run global investment firm in Singapore.

[ⓒ Maeil Business Newspaper & mk.co.kr, All rights reserved]