SK Innovation has announced its plans to increase paid-in capital by approximately KRW 1 trillion, reinforcing its commitment to a virtuous cycle of "stability and growth."
This strategic move follows the successful financing of its subsidiary, SK On, in the battery business. The capital increase aims to secure investment funds for future growth endeavors, bolster research and development capabilities, and establish a robust financial structure. These initiatives are crucial for driving innovation acceleration in the coming years.
The Board of Directors at SK Innovation has approved a paid-in capital increase amounting to KRW 1.18 trillion. The proposed issue price is set at KRW 143,800 per share, with the issuance of 8.19 million new shares, accounting for approximately 8.7% of the total. The final issue price will be confirmed in September. The capital increase will be executed through a general public offering of forfeited stocks after the shareholder allocation process.
In a shareholder letter, Kim Jun, the Vice Chairman and CEO of SK Innovation, shed light on the rationale behind this decision.
“As we innovate to transition from ‘Carbon to Green’, the Company has made sizable investments in battery and other green businesses,” Vice Chairman Kim explained.
“Furthermore, we will expedite the development of new green businesses including the next-generation Small Modular Reactor (SMR), hydrogen/ammonia, energy solutions, and waste-to-energy to consolidate our position as the ‘Green Portfolio Designer & Developer’ in the field of future energy,” he continued.
The "Carbon to Green" strategy, unveiled by SK Innovation in 2021, outlined their goal to increase the share of green assets from 30% in 2020 to 70% by 2025, restructuring the company's operations around sustainability.
Since then, their electric vehicle batteries and separators (LiBS) business has climbed the global ranks, and the company is actively preparing to establish a green campus to strengthen next-generation energy investments, new business development, and R&D infrastructure.
Vice Chairman Kim added, “Aside from the paid-in capital increase, SK Innovation will exert strenuous efforts via diverse measures such as asset rationalization so as to achieve financial stability.”
Vice Chairman Kim also explained how the company will protect shareholder value. “We expect there to be a renewed market assessment on SK Innovation’s corporate value as SK On’s profitability improves quickly buoyed by the US AMPC program’s tax credit benefits and increase in overseas plant productivity.” “Therefore, we decided to offer shareholders the rights to subscribe to the newly issued shares.”
He continued, “SK Innovation shared its policy on mid to long-term shareholder return in conjunction with SK On’s future IPO during the ‘Dialogue with Shareholders’ session last March.” “The Company’s strong commitment to shareholder return still remains valid and we will also explore ways to utilize the treasury stocks owned by the Company to enhance shareholder value.”
Vice Chairman Kim said, “Aside from the paid-in capital increase, SK Innovation will exert strenuous efforts via diverse measures such as asset rationalization so as to achieve financial stability.” He ended the letter by thanking the shareholders’ “unwavering support and for continuing to join us on our journey.”
