06 Nov Kyungnam Energy Grows, In Partnership with Prostar Capital
For Prostar Capital, an international private equity firm founded in Sydney, Australia, and headquartered in Greenwich, Conn. (U.S.), the 2017 acquisition of a majority stake in Kyungnam Energy Co. (“KNE”) represented a major commitment to serving the long-term energy needs of South Korea – and to investing in the community.
As a global investor with a focus on acquiring and growing midstream energy infrastructure assets, Prostar recognized the great potential of Kyungnam Energy – which is South Korea’s largest independent city gas distributor. Headquartered in the Gyeongsangnam-do province, KNE supplies city gas to over 820,000 industrial, commercial and residential customers through a pipeline network spanning 2,299 km.
Since the acquisition, Prostar has helped Kyungnam Energy expand its facilities to better serve a growing South Korean economy. For example, investments by Prostar have enabled KNE to increase its pipeline network by 12.4%. This has allowed the gas distributor to serve a larger portion of South Korea’s energy needs – leading to a 17.2% growth in customers.
Service levels have increased dramatically. KNE ranked as the 2nd best performer among 33 city gas companies in the National Service Level Evaluation conducted by MOTIE in 2018 – a sharp improvement from 25th place before partnering with Prostar. KNE has added strong executive leadership, including a new Chief Executive Officer, In Ku Kang, and Chief Financial Officer, Mr. Jay Lee, to drive further improved performance.
Partnering with Prostar, Kyungnam Energy has strengthened its commitment to the community. Since the acquisition, KNE has hired 32 new employees, almost 85% of whom were local students. The company has continued its internship program, and hired 25 students of the 70 who were involved in the program. Over the past 10 years, KNE has fulfilled its social responsibility by investing over 4 billion KRW in activities such as the Community Chest of Korea, donations of gas appliances to social welfare organizations, housing improvement programs, assistance for disabled persons, and local sports teams. These contributions have continued following the Prostar partnership.
“Prostar was attracted to investing in KNE by a number of positive factors, including the strong outlook for South Korea’s economy and energy consumption, the country’s well-regarded legal and regulatory framework, and the participation of leading South Korean banking institutions in the transaction,” said Dave Noakes, a Founder of Prostar who also serves as Chairman of Kyungnam Energy.
“Kyungnam Energy is a great example of a partnership between Australian and South Korean enterprises. It combines KNE’s leadership in the community with Prostar’s capital, operational experience in the global energy sector, and strategic expertise to serve a growing market and build increasing value,” noted Steve Bickerton, a Prostar Founder and a Director of KNE.