SK E&S raises yield for $2.3 bn RCPS with KKR

[Photo by Han Joo-hyung]

SK E&S Co. has raised the guaranteed yield on 3 trillion won ($2.2 billion) worth of redeemable convertible preferred shares (RCPS) issued to private equity firm KKR & Co. Inc. by up to 2.4 percentage points.

SK E&S held a board meeting on Wednesday where it resolved to amend the terms of the RCPS and the acquisition agreement accordingly. As a result of the board‘s decision, the guaranteed yield on the RCPS issued by SK E&S in 2021 and 2023 was adjusted to 9.9 percent.

SK E&S initially set the guaranteed yield at 7.5 percent when it issued the first tranche of RCPS worth 2.4 trillion won in 2021. For the second tranche of RCPS, the yield was raised to 9.5 percent to reflect the interest rates at the time, with repayment scheduled for five years later. This contract amendment effectively increases the guaranteed yield of the first and second tranches of RCPS by 2.4 percentage points and 0.4 percentage points respectively.