Samsung Sec-led group to buy $760 mn stake in Dunkirk LNG terminal

  • 2018-07-03

A consortium of three South Korean brokerage companies led by Samsung Securities Co. Ltd. will pay around 850 billion won ($758 million) for a 39.24% stake in Dunkirk LNG terminal in France, marking the biggest single investment by South Korean investors in an overseas infrastructure asset.

The group of Samsung Securities, Hanwha Investment & Securities Co. Ltd. and IBK Securities Co. Ltd. was recently named as a preferred buyer of an equity stake in the terminal, alongside a consortium led by Belgian natural gas operator Fluxys, according to EDF and Seoul-based sources on July 2.

French energy giant EDF and Total S.A., France’s oil and gas company, put their combined 75% stake in the liquefied natural gas (LNG) terminal up for sale.

Across prices paid by the two consortia, the average enterprise value for the facility amounts to €2.4 billion, EDF said in a press release on June 29.

It did not disclose financial details of the transaction which is expected to close in September.

The three South Korean brokerage firms – Samsung, Hanwha and IBK – will sell down the equity stake via Samsung Asset Management Co. Ltd. to domestic insurance companies which are required to extend asset durations ahead of the IFRS17 introduction in 2021.

Samsung Asset will launch a 20-year fund vehicle for the resale, offering a 7%-range target annual return.

BROOKFIELD, MIRAE ASSET-HANA FINANCIAL ALSO IN THE BID

Fluxys formed a consortium with AXA Investment Managers – Real Assets and Crédit Agricole Assurances to buy an additional 35.76% stake, on top of its 25% holding.

The Belgian gas infrastructure company exercised the option to increase its ownership.

The other bidding groups included Brookfield Asset Management and another South Korean consortium of Mirae Asset Daewoo Co. Ltd. and Hana Financial Investment Co. Ltd., the sources added.

Rising demand for LNG in France and Belgium fueled interest in the LNG terminal, with European countries shifting away from coal and nuclear power.

Infrastructure assets are also expected to produce higher yields than bonds in a rising interest rate environment.

IPM Group comprised of InfraPartners Management (IPM) Korea Co. Ltd. in Seoul and InfraPartners Management LLP in London advised the Samsung-led consortium on the equity deal.

IPM Korea is being led by Jurae Kang, who had worked for Samsung C&T Corporation.

Located in the port of Dunkirk in northern France, the facility is the largest LNG terminal in continental Europe and the only terminal to be connected directly to France and Belgium, using two separate pipelines.

It has an annual regasification capacity of 13 billion cubic meters of gas, which can meet approximately 20% of annual consumption in France and Belgium.

By Daehun Kim

daepun@hankyung.com

<Edited by Yeonhee Kim>

Photo: Getty Images Bank