POSCO International is set to provide approximately 1 trillion KRW (about 734 million USD) in funding to its U.S. resource development subsidiary for the acquisition of American shale gas assets.
On Monday, according to a filing with the Financial Supervisory Service’s electronic disclosure system, POSCO International announced a 532.9 billion KRW (about 391 million USD) investment in its U.S. subsidiary, POSCO International E&P USA, through a capital increase.
The investment will take the form of POSCO International acquiring 2,000 newly issued shares from E&P USA.
In addition to this equity investment, POSCO International has committed to a loan of 266.1 billion KRW (about 195 million USD) to E&P USA. The company will also provide a debt guarantee of roughly 1.0523 trillion KRW (about 773 million USD) to facilitate E&P USA’s external fundraising efforts.
The core of this financial support is to enable E&P USA to secure the necessary capital for acquiring U.S. shale gas assets.
POSCO International has been steadily expanding its energy portfolio, with significant investments in gas fields in Myanmar and Australia’s Senex gas field. This latest move to secure U.S. shale gas assets appears to be a strategic step to further broaden the company’s global gas resource development operations.