KB Asset Management's 'Balhae Infrastructure' Securities Registration Statement Takes Effect... IPO Launches in Earnest

KB Asset Management's private infrastructure fund, 'KB Balhae Infrastructure Investment Company' (Balhae Infrastructure), is set to officially launch its initial public offering (IPO) for listing on the KOSPI market.

KB Asset Management announced on the 1st that it will proceed with the IPO process as the effectiveness of the securities registration statement submitted to the Financial Services Commission in mid-last month has taken effect. If Balhae Infrastructure, launched in 2006, goes public, it will become the first domestic native public infrastructure fund.

The total number of shares offered by Balhae Infrastructure is 23,809,524, with an offering price of 8,400 KRW per share. The demand forecast for institutional investors will be conducted over three days starting from the 8th, and the subscription for public shares for general investors will take place over two days starting from the 18th. Approximately 200 billion KRW will be raised through the offering. KB Securities is the lead underwriter, with Kiwoom Securities and Daishin Securities serving as joint underwriters.

Balhae Infrastructure's main investment targets are social overhead capital (SOC) such as toll roads, tunnels, and railroads. Currently, it invests in high-quality toll road assets used by about 108 million vehicles annually, including the Daegu-Busan Expressway, Suseok-Hopyeong Road, Yongma Tunnel, Sanseong Tunnel, and Suwon Outer Ring (Northern) Road, distributing operating income as dividends.

The private investment projects that Balhae Infrastructure primarily invests in enable long-term stable profit generation through agreements with the government. Its inflation-linked revenue structure allows it to maintain profitability even in high inflation conditions. As of the second half of this year, Balhae Infrastructure's expected dividend yield exceeds 7%. Since the dividend payment recipients are confirmed based on the year-end settlement, public investors who hold shares until the end of this year will receive the same dividends as existing shareholders.

In the case of REITs, the borrowing limit ratio is 200% of equity capital, but for public infrastructure funds like Balhae Infrastructure, the borrowing limit ratio is restricted to 30% of capital, which relatively lowers operational risks caused by rapid interest rate fluctuations.

Kim Hyung-yoon, Head of Alternative Investments at KB Asset Management, said, "Balhae Infrastructure is an infrastructure fund offering an attractive dividend yield, with the advantage of securing high stability and profitability in a highly volatile market environment." He added, "We actively recommend investment to asset owners seeking a stable investment destination for retirement funds and tax-saving effects."