Macquarie faces backlash over gas supplier takeover

Activists from nine civic groups in Gwangju hold a press conference in front of the Gwangju City Hall, June 2, to protest Macquarie's acquisition of Haeyang Energy. Courtesy of civic groups

Civic groups to hold rally at asset manager's Seoul office next week

By Park Jae-hyuk

Macquarie is facing difficulties in resolving a conflict with civic groups in Gwangju over its recent takeover of Haeyang Energy, the southwestern metropolitan city's exclusive gas supplier, from Glenwood Private Equity.

Local activists have warned the Australian asset management firm about more aggressive protests, although Macquarie Korea Asset Management CEO Seo Bum-sik promised his company would pursue co-prosperity with Haeyang Energy's customers, employees and regional communities.

Nine groups in the region, including the Korean Confederation of Trade Unions (KCTU), the Citizens' Coalition for Economic Justice and the Justice Party, said they will hold a rally next Tuesday in front of Macquarie's Seoul office.

They will also push ahead with meetings with Macquarie officials and lawmakers of a standing committee overseeing the matter.

“We are deeply concerned about the free trade of the public service provider for the sake of the speculative capital's profits,” the civic groups said in a statement.

They plan to hold an open debate at the Gwangju Metropolitan Council sometime in July.

Gwangju Mayor Lee Yong-seop and Council Chairman Kim Yong-jyb have supported the civic groups, alleging Glenwood's unilateral decision to sell Haeyang Energy goes against the recent trend of management considering environmental, social and corporate governance (ESG) factors.

“The city government and council demand Macquarie give clear and responsible answers, and disclose specifics about the deal,” the mayor and the chairman said in a joint statement, June 17.

They expressed concerns about the possibilities of a price hike, Haeyang Energy's insolvency, job instability and deterioration of the working environment at the company.

Macquarie Group headquarters in Sydney / Yonhap

Macquarie, however, refuted the claims, citing the possibility of a misunderstanding.

“We are not authorized to fix the gas rate, because the city government has the right to decide it,” a spokeswoman at Macquarie's Seoul office said. “We will continue to communicate with the civic groups, explaining to them our long-term investment plans.”

Although she declined to comment on specifics about employment succession, Macquarie's agreement with Glenwood reportedly guarantees five-year job stability to Haeyang Energy workers and wages similar to the average of the past three years. When Macquarie acquired Kangnam City Gas in 2012 and sold it to Kiturami in 2016, it did not carry out workforce restructuring.

However, the Haeyang Energy union is still worried about whether or not its members will be guaranteed job security.

Founded in 1982, Haeyang Energy had been owned by GS Caltex for 17 years since 2001, and was sold to Glenwood in December 2018. It is the sole gas supplier in Gwangju, and the proportion of gas it supplies in South Jeolla Province was around 33 percent as of the end of 2020.

Macquarie signed a 798 billion won ($705 million) agreement with Glenwood earlier this month to acquire a 100 percent stake in Haeyang Energy and Seorabeol City Gas, the supplier of gas for Gyeongju and Yeongcheon in North Gyeongsang Province. The deal is expected to be closed in July.