SK Group will buy a 10 percent stake in Malaysian low-cost carrier Air Asia for about 100 billion won ($84 million), but has not yet decided whether it should be handled by the corporate partnership (COPA) fund of its Southeast Asian investment arm.   

Sources said on Wednesday (June 10) that a funding plan for the acquisition was still being finalized.

“There are internal views that it’s not appropriate to make the investment through the COPA fund, considering the size of the investment of 100 billion won is not that large,” said one industry source. “Further discussion is needed as the deal is only in the early stages.”

SK Southeast Asia Investment launched the 1.2 trillion won (then $1 billion) COPA fund with the South Korean National Pension Service at the end of 2019 to invest in Vietnamese companies with high growth potential. Each investor contributed $500 million. NPS has hired SKS Private Equity and Stonebridge Capital as its general partners.

The fund bought a stake in leading Vietnamese company Vingroup immediately after the launch in late 2019, but hasn’t made any subsequent investments after the Covid-19 outbreak made it difficult to find opportunities. Against this backdrop, SK Group was approached by Air Asia to acquire a 10 percent shareholding.

If it is decided to make the investment through the COPA fund, SK Southeast Asia Investment and NPS are expected to each contribute 50 billion won.

SK Group also launched a 1.2 trillion won COPA fund late last year with the Korean Teachers’ Credit Union for cross-border investments. Capital from the fund was used for an investment in U.S.-based Brazos Midstream, which supplies natural gas and crude oil gathering facilities. (Reporting by Hyeran Kim)