The energy industry is busy restructuring their business by selling off assets and offering early retirement programs.
Although energy firms saw their financial results improve somewhat this year after going through a rough patch for years due to low oil prices and oversupply, they still believe this is an anomaly and will soon face a downturn again.
SK Innovation, for example, has so far this year to date sold off non-essential assets worth 290 billion won, including TgP (Transportadora de Gas del Peru), a Peruvian firm that specializes in transport of natural gas and liquefied natural gas, at US$251 million for an 11.19-percent stake.
Its subsidiaries including SK Incheon Petrochem and SK Energy are currently undertaking a bidding procedure to sell off land holdings worth 20 billion won and 20.8 billion won respectively. SK Innovation completed its special retirement program last month without much ado. About 300 employees, 5 percent of the company's total workforce, have left the company through the program.
OCI, meanwhile, decided to dispose of OCI Materials, its subsidiary in specialty gas, by selling all its 49.1-percent stake. The company has already selected Credit Suisse as the underwriter and conducted due diligence. It plans to select the final bidder by the end of August. Daesung Group is trying to sell land plots in Yongin and a D-Cube Department Store in Geoje in the nation's southeast. Earlier the group had successfully sold a 23,000-square-meter land site in Yongin to Fides PMC at 96.7 billion won.
Overall, analysts estimate the restructuring efforts under way by energy firms are going smoothly. The talks to sell off SK Lubricants by SK Innovation with MBK Partners were reported to have fallen through. But other investment banks have recently contacted the company for possible offers. As for OCI Materials, foreign companies like Air Products & Chemicals and Kanto Denka Kogyo are showing interest in acquiring it.
