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Labor issue potential risk to SK ecoplant's IPO
SK ecoplant CEO Park Kyoung-il presides over an extraordinary meeting of shareholders at the company headquarters building in Seoul in this December 2021 file photo. Courtesy of SK ecoplant
By Park Jae-hyuk
By Park Jae-hyuk
SK ecoplant's union, which was organized last November to protest the management's decision to spin off the plant construction division and sell it to a private equity firm (PEF), is being viewed by market insiders as a potential risk to the builder's attempt to go public in 2023.
According to industry sources, the union ― comprised of workers who will stay at SK ecoplant and those who will be transferred to the spun-off company, named, “SK eco engineering” ― is considering joining the Federation of Korean Trade Unions to exercise more influence over the company. Last December, they held rallies in front of SK Group's headquarters demanding job security.
The transferred workers are particularly concerned about the possibility of SK Group not reacquiring SK eco engineering from the PEF.
Although the management told workers that SK eco engineering will return to the group within a year after its spin-off, unionized workers cited the case of SK TNS, an ICT infrastructure company that was spun off from SK ecoplant in 2015 and could not return to the group after being sold to a PEF.
“The intention of restructuring is inherent in the recent spin-off,” a member of the union said.
If the spin-off eventually ends in a restructuring, SK ecoplant is expected to face a labor conflict, which would weigh on its ambitious initial public offering (IPO) plan.
SK ecoplant CEO Park Kyoung-il said in his New Year's address that the company will complete preparatory works this year for an IPO. His predecessor also said the company aims for an estimated valuation of 10 trillion won ($8.4 billion) after the listing.
For this goal, SK ecoplant appointed Nam Gi-cheol late last year as an executive in charge of the IPO. It also reportedly established a taskforce team and hired an investment banking expert from Samsung Securities.
In response to concerns about the ongoing labor conflict, SK ecoplant stressed that its recent spin-off differs from that of SK TNS.
“Our CEO told employees last year that our company will not go public unless SK eco engineering regains its status as SK subsidiary,” an SK ecoplant official said.