'KT Cloud Main Bid' Narrowed Down to a Three-Way Contest Among KKR, VIG, and IMM

Investment Attraction Within Maximum 20% Equity Stake
Estimated Corporate Value of 3 to 4 Trillion KRW
Expected Investment Equity Value of 600 to 800 Billion KRW

[Asia Economy Reporter Park So-yeon] Three major domestic and international private equity funds (PEFs) are competing in the final bidding for the large-scale investment attraction being promoted by KT Cloud.

According to the investment banking (IB) industry on the 29th, three firms?Kohlberg Kravis Roberts (KKR), IMM Credit Solution (ICS), and VIG Alternative Credit (VAC)?are expected to participate in the final bidding for KT Cloud's investment attraction scheduled for the 6th of next month.

Earlier, KT Cloud, through its lead investment bank Credit Suisse (CS), notified the final bidding schedule not only to KKR, ICS, and VAC but also to Mirae Asset Global Investments, Macquarie Infrastructure Asset Management PE Division (Macquarie PE), and Digital Bridge PEF.

An IB industry insider hinted, "The investors have been narrowed down to three, who will now compete."

KT Cloud plans to raise funds within a maximum equity stake of 20%. The exact scale, price, and other specific investment conditions have not yet been determined. However, reflecting KT Cloud's corporate value of around 4 trillion KRW, an investment attraction of approximately 600 billion to 800 billion KRW is expected for a 15-20% equity stake.

KT Cloud was launched in April through KT's physical division. It provides cloud services to corporations and the government and operates IDC centers. It is the second-largest player in the cloud sector and the number one operator in the IDC segment. KT Cloud aims to achieve sales of 2 trillion KRW by 2026.

Meanwhile, KT Cloud postponed the final bidding schedule from the original date of the 29th of this month to next month. The bid delay was made at the request of the shortlisted houses. They judged that the schedule was too tight to complete the ongoing due diligence and investment fundraising preparations within this month. PEFs are struggling to secure various funding options amid the recent interest rate hikes, with senior acquisition financing rates entering the 8% range.

An IB industry official said, "From KT's perspective, the funding conditions are not as favorable as when the investor recruitment first began," adding, "Financial investors (FIs) are also deeply deliberating until the last moment on what conditions they should accept in this situation."