Woori Bank closed a won 2.6 trillion ($1.8 billion) acquisition financing arrangement for SK Innovation’s liquefied natural gas subsidiaries, marking the lender’s largest deal on record and the biggest new acquisition financing completed in South Korea this year.
The financing supports Narae Energy Service and Yeoju Energy Service, which raised won 3 trillion through convertible preferred shares. Woori Bank structured most of the senior acquisition financing, while affiliate Woori Investment Securities arranged won 145 billion ($101 million).
The package consists of a won 2.4 trillion term loan and a won 200 billion revolving credit facility. The two LNG power plants generated combined earnings before interest, taxes, depreciation and amortization of about won 470 billion ($328 million) last year.
Woori Bank set the loan-to-value ratio at roughly 40 percent and implemented financial covenants to monitor the companies’ operations. The bank’s investment banking division has closed double-digit deal volumes annually for three consecutive years.
The transaction represents Woori’s push to rebuild its presence in investment banking after selling its securities unit to NongHyup Financial Group in 2014. The lender relaunched its brokerage arm last year following a decade-long absence from the sector.
