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SGC Energy |
[Alpha Biz= Reporter Kim Jisun] Glenwood Private Equity (PE) has withdrawn its plan to acquire biomass power company SGC Green Power.
SGC Energy announced on Friday that it has decided to cancel the sale of 100% of its stake in SGC Green Power to Glenwood PE.
Previously, on October 30, SGC Energy's board of directors had approved the sale of 100% of its stake in SGC Green Power to Glenwood PE, with the agreed sale price set at 3.22 trillion KRW.
Market sources believe that the recent government announcement to reduce subsidies for biomass electricity generation is linked to the decision to cancel the acquisition. The Ministry of Trade, Industry, and Energy, the Ministry of Environment, and the Korea Forest Service announced on the 18th the "Measures for Improving the Biomass Fuel and Power Market Structure." This includes plans to reduce government support for electricity produced from biomass.
The government is responding to criticism that biomass power generation using wood is not very environmentally friendly, and has decided to lower the renewable energy certification (REC) weight for wood pellets and chips from 1.5 in 2023 to 0.5 in 2027. As a result, biomass power producers will receive fewer RECs for the same amount of electricity, potentially harming their profitability.
Alphabiz Reporter Kim Jisun(stockmk2020@alphabiz.co.kr)
