Prostar Capital, together with funds and accounts managed by BlackRock Infrastructure Solutions Group, has acquired more than 95 percent of the shares of Kyungnam Energy Co., which is an independent, pure-play city gas distributor in South Korea.
Prostar acquired the stake in Kyungnam Energy from the existing controlling stakeholders.
The investment was made via a consortium comprising the Prostar Asia-Pacific Energy Infrastructure Fund, together with funds and accounts managed by BlackRock Infrastructure Solutions Group. Prostar led the acquisition on behalf of the consortium and will manage the consortium’s investment going forward.
Prostar’s investment has been made through its newly established platform vehicle dedicated to building a diversified portfolio of investments in the gas distribution sector across the Asia Pacific region
Kyungnam Energy was established in 1972 and is the largest independent, pure-play city gas distributor in South Korea. It has an exclusive license to supply gas to nine cities/counties in the Gyeongsangnam-do province in the southeast of the Korean peninsula. Kyungnam Energy supplies city gas to over 600,000 residential, 900 industrial and 50,000 commercial customers in the Gyeongsangnam-do province through a pipeline network spanning 1,239 miles and including Changwon and Gimhae, the two largest cities in the province by population.
Total demand for gas in the Gyeongsangnam-do province isexpected to grow at more than 2.8 percent per year to 2020, according to the Korea City Gas Association. This growth requires substantial ongoing capital investment in network expansion. Prostar will seek to support the local management team of Kyungnam Energy to further develop the network and continue to safely and efficiently supply gas to its customers in the Gyeongsangnam-do province.