SK E&S has sold its entire stake in a Chinese private gas company to prevent a liquidity crisis as demand in the energy market plunged since the global coronavirus pandemic.
The energy unit of SK Group said it sold all of its 10.25 percent stake (535 million shares) in China Gas Holdings through a block deal on the Hong Kong Stock Exchange the previous day in a regulatory filing Friday.
The sale price was 1.8 trillion won ($1.4 billion), 11.1 percent off the closing price of the contract date, through demand forecast. In September last year, SK E&S also disposed of its 3.3 percent stake in CGH for 786.8 billion won. Currently, only its subsidiaries own stakes in CGH, totaling 1.45 percent.
SK E&S said the move was aimed at “improving its financial structure.”
Concerns over a liquidity crisis for energy companies have been growing due to the recent coronavirus outbreak. International credit rating agency Standard & Poor’s also predicted in a report last month that “the pressure on SK E&S’ financial indicators would intensify due to increased capital spending and borrowing from investments in the Australian liquefied natural gas project.”
By Shin Ji-hye (email@example.com