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The 1915 Çanakkale Bridge in Turkey under construction by SK Ecoplant and DL E&C of Korea Pre-initial public offering of SK Ecoplant Co., formerly known as SK Engineering & Construction Co., is becoming a hot topic in the private banking market in the upscale Gangnam district of Seoul.Some wealthy individuals have competitively joined the pre-IPO investing, while pre-IPOs, in general, are regarded as open only to institutional investors due to large amount of funding. The pre-IPO of SK Ecoplant, the construction unit of South Korean conglomerate SK Group, is expected to distribute more than double returns in a year as well as minimize the risk of capital loss, attracting some rich individuals in Gangnam. Its pre-IPO reached 800 billion won ($651.2 million), set to sell 600 billion won worth of newly-issued convertible preferred stocks (CPS) and 200 billion won worth of shares its chemical affiliate SK Discovery Co. owns. The weighted average price per share is calculated as 94,700 won, and the corporate value after the pre-IPO is estimated to be 4 trillion won. Four Korean financial investors participated in the pre-IPO funding -- Premier Partners LLC injected 280 billion won, Ium Private equity and the consortium of Brain Asset Management Co. and NH Investment & Securities Co. respectively invested 200 billion won, and Find Value Asset Management put 120 billion won.Find Value is understood to have sold a 120 billion won project fund out to individuals within several days via Samsung Securities Co. The private fund allowed individuals’ participation with 300 million won or higher commitment per person, and deep-pocketed investors flocked to the fund in hopes of more than double return after the IPO in the second half of 2023. The lead manager candidates estimate the corporate value at the timing of IPO as 8 trillion to 13 trillion won.The investors were also attracted by the pre-IPO’s stability as SK Ecoplant will gradually raise the CPS’ dividend rate if it fails in IPO in a certain period. Formerly SK E&C, SK Ecoplant was renamed in May 2021 in part of transferring its identity to environment-friendly company. It acquired Korea’s largest waste treatment company EMC Holdings Co. for 1 trillion won in 2020 and bought Singapore-based electronic waste disposal and recycling company TES-Envirocorp Pte for 1.2 trillion won in February of this year. Its success in IPO depend on how the market will evaluate these efforts in enhancing ESG business.By Jun-Ho Chachacha@hankyung.comJihyun Kim edited this article.
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