SK Gas to sell Istanbul tunnel stake to Qatari fund for $111 mn

SK Gas Ltd., South Korea’s leading liquefied petroleum gas (LPG) supplier, is poised to sell its stake in an operator of the Eurasia Tunnel in Turkey to an affiliate of Qatar’s sovereign wealth fund to raise money for future growth.

SK Gas said on Thursday it has decided to unload its entire 36.49% stake in SK Holdco Pte. Ltd., which operates Avrasya Tuneli Isletme Insaat ve Yatirim AS (Atas), a sub-sea road tunnel in Istanbul, at 143 billion won ($111 million).

The unit of South Korea’s No. 2 conglomerate SK Group plans to sign a share purchase agreement with an affiliate of the Qatar Investment Authority soon with a goal to complete the sale in one year.

“The sale of the Eurasia tunnel stake is aimed at improving the financial structure and raising funds for new businesses through an asset securitization,” said an SK Gas official. “The proceeds will be used to create a foundation for new businesses of future growth such as hydrogen, liquefied natural gas terminals and combined gas power plants.”

SK Gas bought the stake in SK Holdco for $52 million in 2015.

Atas, which crosses underneath the Bosporus strait, connects Istanbul’s European and Asian sides. The highway tunnel with the world’s first 5.4-kilometer twin deck has significantly improved the notorious traffic jams in the city since it was opened in December 2016.

SK Ecoplant Co., formerly known as SK Engineering & Construction Co., led the project development, construction and project financing to build the tunnel.

Write to Ik-Hwan Kim at lovepen@hankyung.com
Jongwoo Cheon edited this article.