Ocean takes over SK Ocean Plant, interested in regional coexistence
Quick Look
Gyeongsangnam-do and Goseong-gun are discussing six areas of regional coexistence with The Ocean Asset Management as the sale of SK Ocean Plant has become a fait accompli, and have agreed to implement existing investment agreements and preferential hiring of local residents, but are unable to reach a full agreement due to differences of opinion due to the issue of employee settlement in Changwon and Tongyeong.
AI-generated summary
Why It Matters
Goseong-gun, Gyeongsangnam-do is a small city with a population of less than 50,000, and SK Ocean Plant is the region's largest company and a key source of employment. The company in question has sales approaching 1 trillion won in the fields of offshore wind power, shipbuilding, and plants, and has received large-scale support for national road improvement and housing construction through designation as a special opportunity development zone.
(Goseong, Gyeongsangnam-do = Yonhap News) Reporter Jeong-hoon Lee = Interest is focused on the extent to which Ocean Asset Management, a private equity fund management company that is acquiring SK Ocean Plant, will present a win-win plan for the local community despite opposition from residents of Gyeongnam Province and Goseong-gun, Gyeongnam.
According to Gyeongnam Province on the 11th, the province and Goseong-gun have taken the sale of SK Ocean Plant as a fait accompli and are discussing regional coexistence plans in six areas with Ocean Asset Management.
The province and Goseong-gun emphasized that even if The Ocean Asset Management takes over SK Ocean Plant, the operator of the Yangchon and Yongjeong Opportunity Development Zone in Donghae-myeon, it must still implement the contents of the April 2024 investment agreement to invest 950 billion won in the Yangchon and Yongjeong districts and hire 3,600 people.
Goseong-gun began discussing regional coexistence plans in early September, right after the announcement of the sale of SK Ocean Plant, urging Ocean Asset Management to implement the existing investment agreement.
The two sides agreed on succession of employment for SK Ocean Plant employees, priority transactions with local companies in Goseong-gun, and priority hiring of local residents and preferential treatment of additional points when hiring.
Ocean Asset Management also proposed fostering Donghae Elementary School in Donghae-myeon, where SK Ocean Plant is located, into a global maritime specialized school by assigning native-speaking teachers and supporting overseas training for students, and donating scholarships to the local community, which Goseong-gun accepted.
However, there are differences of opinion on how to settle SK Ocean Plant employees who commute from Changwon-si, Tongyeong-si, etc. in Goseong-gun, making it impossible to reach an agreement on an overall coexistence plan.
Separately from the coexistence plan, The Ocean Asset Management will submit an investment and employment implementation plan to the province by the 16th.
After acquiring SK Ocean Plant, Ocean Asset Management includes investment and employment plans, future business and order plans, etc. in the implementation plan.
The reason why the province and Goseong-gun are sensitive to the sale of SK Ocean Plant is because of the company's importance and symbolism in the local economy.
SK Ocean Plant, an affiliate of SK Group and specialized in offshore wind power, shipbuilding, and plants, had sales approaching KRW 1 trillion (KRW 965.4 billion) as of last year and directly employs more than 700 people.
It is the largest company in Goseong-gun, which has a population of less than 50,000.
The number of employees at partner companies amounts to about 2,000 at about 30 companies.
In addition, it is a business operator in the Yangchon-Yongjeong Opportunity Development Zone in Donghae-myeon, Goseong-gun, which was designated by the government as 'Gyeongnam's first opportunity development zone' in June 2024 with the goal of becoming the world's largest offshore wind power substructure production base.
The province and Goseong-gun promoted support projects worth KRW 167.2 billion, including improving the National Highway No. 77 route leading to the special zone, opening access roads, and building housing to support jobs, and fully supported even the construction of transmission lines and permits for public water reclamation.
In this situation, when SK Eco Plant, the largest shareholder of SK Ocean Plant, announced on September 1 last year that it had selected Ocean Asset Management Consortium as the preferred negotiating party for the sale of SK Ocean Plant, both the province and Goseong-gun strongly opposed it.
The province and Goseong-gun are concerned that if the sale of SK Ocean Plant becomes a reality, there will be a serious negative impact on the overall local economy, including disruption of the special opportunity development zone construction project, which had a completion rate of 60% as of last September, uncertainty in employee employment succession and maintenance of partner company contracts, and the possibility of cancellation of the opportunity development special zone.
SK Ocean Plant finally announced on August 31 that its largest shareholder (SK Eco Plant) would sell its entire stake (35.62%) to Ocean Asset Management for 410 billion won.
With this stake sale, Ocean Asset Management will become the largest shareholder of SK Ocean Plant.
SK Ocean Plant announced that the stake disposal period will be completed by the end of December.
What to Watch
AI outlook — possibilities, not facts
The Ocean Asset Management will submit an investment and employment implementation plan to Gyeongnam Province ahead of completing the sale of shares by the end of December.
Very likely · Within weeks
Gyeongsangnam-do and Goseong-gun will continue further negotiations to resolve the settlement issue of employees in Changwon and Tongyeong.
Likely · Within weeks
Open Questions
- How will The Ocean Asset Management solve the problem of Changwon and Tongyeong employees settling in Goseong-gun?
- If an agreement on the coexistence plan fails, what additional measures will Gyeongnam Province and Goseong-gun take?
- What are the specific contents of the investment and employment implementation plan presented by The Ocean Asset Management?
