Baker advises SK Holdings sale of ESR Cayman stake

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baker mckenzie esr cayman shipping trade

SK Holdings, the parent company of South Korean conglomerate SK Group, has sold its shares in ESR Cayman for HK$3.15 billion (US$406 million). Baker McKenzie advised SK on the deal, while Merrill Lynch (Asia-Pacific) and Morgan Stanley acted as the group’s placing agent.

The Baker McKenzie team was led by partner Ivy Wong, with support from associates William Cho and Stephanie Chen in Hong Kong, and in collaboration with principal Kenny Kwan of Baker McKenzie Wong & Leow in Singapore.

“Now that it has been months since covid-19 was declared a pandemic, professional parties and clients have certainly become more accustomed and open to remote or online negotiations and executions,” Wong told Asia Business Law Journal. “Commercial terms that address covid-19 issues have also become more developed and acceptable to parties, which makes completion of transactions more possible and probable.”

However, Wong said that the level of challenges varied, depending on the type of transaction involved. Cross-border deals traditionally done remotely, and where terms are more standardised, such as private placements, generally run more smoothly and quickly than those that require physical presence of the parties, such as onsite diligence, property valuation and face-to-face negotiations for IPOs and M&A.

SK is listed on the Korea Stock Exchange, and its subsidiaries are engaged in the business of energy, telecoms and semiconductors. ESR Cayman, an Asia-Pacific logistics real estate operator, is listed on the Hong Kong Stock Exchange.

Following the completion of the sale, SK remains one of the key shareholders of ESR Cayman, holding about 6.4% of ESR Cayman’s issued share capital. SK will use the sale to expand its biopharmaceuticals, semiconductors, rechargeable batteries, big data and artificial intelligence (AI) industries.