A South Korean investment firm has won the competition to buy a minority stake in SK Lubricants, according to local news reports, but no agreement has been announced by parent company SK Innovation, and reports disagree on details of the deal.
Several outlets reported the past week that Seoul-based IMM Private Equity beat out three other bidders to acquire part ownership of the base oils and finished lubricants business. Three Maeil Broadcasting Network sites reported between Tuesday and Thursday that IMM would acquire 49% of SK Lubricants. On Thursday the Korean Economic Daily, nicknamed Hankyung, reported that the deal was for 40%, and a Seoul Economic Daily article on the same day said the sides were still trying to settle on a portion between 30% and the high 40s.
Reports on the value of the transaction ranged between U.S. $1 billion and an unspecific amount about 400 million won higher.
SK and IMM declined to comment.
If an agreement is reached, it would mark the culmination of a prolonged effort by SK Innovation to raise funds from its base oils subsidiary. Over the past eight years, the company tried three times to conduct initial public stock offerings for the business, but it backed away each time after concluding that the investment environment was not ripe or that that interest was insufficient.
Last August the company switch tacks, announcing it would explore a sale of all or part of SK Lubricants. SK Innovation has said that it wants to raise funds that can be invested in its new electric vehicle batteries business.
SK Lubricants is by far the world’s largest producer and merchant supplier of API Group III base stocks, with a wholly owned plant in Ulsan, South Korea, and joint ventures in Dumai, Indonesia, and Cartagena, Spain. The business also markets finished lubricants.
IMM, which is 15 years old, claims to be one of South Korea’s leading private equity firms with $5.4 million in assets managed. It does not appear to have other investments in the lubricants industry.