This article was published on April 20, 2025, at 11:21 a.m. on the ChosunBiz MoneyMove site.
Global private equity fund manager EQT Partners is pursuing refinancing for the acquisition financing of SK shieldus. It has ample time until September to complete the deal, but the scale is expected to exceed 3 trillion won, prompting proactive fundraising measures.
The amount is so large that competition among institutions is already reported to be fierce, although there is skepticism about whether fundraising will be successfully completed. Since EQT acquired control of SK shieldus, there have been criticisms that the company's value is excessively high, and given that the company's performance has not improved compared to that time, evaluations indicate there is little incentive for refinancing.
According to investment banking (IB) industry sources on the 20th, EQT, the major shareholder of SK shieldus, is in contact with domestic institutions for the acquisition financing refinancing.
Earlier, in 2023, EQT acquired a 68% stake in SK shieldus. At that time, SK shieldus was valued at 5 trillion won, which was significantly higher than the price point (upper band of the public offering price of 3.5 trillion won) proposed when the company aimed to go public in 2022. The fact that S-1, the industry leader, has a market capitalization of only around 2 trillion won also attracted attention.
Two years ago, the scale of the acquisition financing was 2.35 trillion won, with KB Securities taking sole charge. At that time, the interest rate was in the upper 7% range, and the maturity was five years. It is estimated that the annual interest cost amounts to about 170 billion won.
Of the 2.35 trillion won, 2 trillion won is in the form of a term loan, while 350 billion won is said to be in RCF format. RCF is a type of overdraft account that allows withdrawals to be made as needed within a limit.
The market estimates that the scale of this refinancing will exceed 3 trillion won. Since the 350 billion won RCF is only for two years, the amount withdrawn within the limit must be converted into a term loan. If we assume that the RCF is reopened for 350 billion won, the term loan is expected to increase by 350 billion won, along with a corresponding increase in the RCF.
In addition, separately from the acquisition financing, the 450 billion won loan from SK Square to EQT will mature at the end of September, and applying a 7% interest rate, it is estimated that the repayment amount will exceed 500 billion won. Considering all these factors, the refinancing scale is expected to approach 3.2 trillion won.
An IB industry official noted, "Currently, it is difficult for EQT to add more equity, and it is also not expected that SK Square will extend the maturity."
This case represents a large-scale investment conducted by SK shieldus for the first time in the country after EQT merged with Bearing PE. If additional equity is injected at this point, it could be labeled as a "failed investment." From SK Square's perspective, it is also challenging to extend the maturity of a loan worth hundreds of billions of won due to financial difficulties affecting the entire group.
Through this rebalancing, the borrower for the acquisition financing is expected to shift from a special purpose company (SPC) to SK shieldus. Two years ago, EQT established SPC Korea Security Holdings (KSH) to make SK shieldus a 100% subsidiary, structuring the deal so the SPC would directly borrow funds, but this time aims to change the structure so SK shieldus directly borrows the acquisition financing. Industry insiders expect that by acting as the borrower, the company can lower interest rates.
Given the large scale, the competition among institutions is said to be fierce. An IB industry official noted, "There are already reports that 6 to 7 institutions have approached EQT requesting quantities."
However, considering the company's performance, it is difficult to view it as an attractive deal in itself, and it is anticipated that there will be considerable difficulties until the refinancing is completed.
In March 2023, EQT signed a stock purchase agreement (SPA) for the acquisition of SK shieldus, during which the company's revenue and operating profit for the previous year, 2022, were 1.79 trillion won and 145.3 billion won, respectively. Last year, SK shieldus's revenue and operating profit were 2 trillion won and 141.6 billion won, respectively. While revenue increased, operating profit actually decreased.