[BizHanKook] SK Inc., the holding company of SK Group, has decided to abandon the initial public offering (IPO) of SK Ecoplant and will instead pursue making it a wholly owned subsidiary. To this end, the company plans to invest up to 1.4462 trillion KRW to buy back shares held by external shareholders. SK Ecoplant had been preparing for a listing since 2022 but failed to meet the agreed-upon deadline for this year. Following the acquisition of a portion of financial investors' (FI) stakes in April, SK Inc. has now set out to secure the remaining external shareholder stakes.
According to SK Inc. on the 5th, the company held a board meeting the previous day and resolved to purchase 16,434,638 common shares of SK Ecoplant off-market. The purchase price is 88,000 KRW per share, which accounts for approximately 25% of the total issued shares. The purchase period runs from November 5th to the 24th, with NH Investment & Securities handling the administrative process.
The purchase price is approximately 53% higher than the weighted average price of 57,536 KRW for SK Ecoplant shares traded on the K-OTC market over the past month. Compared to the weighted average price of 63,600 KRW on the 3rd, it represents a premium of about 38%. SK Inc. explained that an external accounting firm calculated the purchase price by taking into account asset value and future earnings potential.
This transaction will be conducted by applying the public tender offer procedure to unlisted shares. After purchasing the subscribed shares, SK Inc. plans to secure a 100% stake in SK Ecoplant through processes such as a comprehensive share swap, which will involve providing cash to the shareholders.
FI Stake Liquidation Follows Missed IPO Deadline
When SK Ecoplant raised capital from external investors through a pre-IPO round in 2022, it agreed to go public by July 21, 2026. However, as the listing did not take place within the timeframe, issues regarding the investors' exit strategy arose.
In response, SK Inc. spent approximately 400 billion KRW in April to acquire some of the common shares and convertible preferred shares (CPS) held by FIs. SK Ecoplant also decided in June to acquire 1,327,868 convertible preferred shares for 650 billion KRW. Following SK Inc.'s stake acquisition, its shareholding in SK Ecoplant increased from 66.7% to 71.2% based on the number of issued shares. Its voting rights stake stands at approximately 74%.
If all shares subject to this off-market purchase are subscribed, SK Inc. will spend up to an additional 1.4462 trillion KRW. Combined with the approximately 400 billion KRW spent on the FI stake acquisition in April, the total expenditure for both transactions will be up to approximately 1.8462 trillion KRW. However, the actual scale of the off-market purchase will depend on the number of shares subscribed by shareholders, and the funds required for the subsequent share swap have not yet been finalized. The 650 billion KRW acquisition of convertible preferred shares carried out by SK Ecoplant itself is separate from SK Inc.'s share acquisition costs.
SK Inc. cited the resolution of concerns regarding "double listing" as the background for the push to make it a wholly owned subsidiary. The company noted that if SK Ecoplant were to be listed separately, the corporate value of the existing listed company, SK Inc., could be discounted. It also explained that this off-market purchase provides minority shareholders with an opportunity to exit their investments.
Business Restructuring Focused on Semiconductors and AI… Push for Wholly Owned Subsidiary Status
While preparing for its IPO, SK Ecoplant expanded its business structure—previously centered on construction and environment—into the fields of semiconductor materials and artificial intelligence (AI) infrastructure. In 2024, the company incorporated SK Airplus, an industrial gas firm, and Essencore, a semiconductor module company, as subsidiaries. Last year, it added four semiconductor material companies: SK Trichem, SK Resonac, SK Materials JNC, and SK Materials Performance.
Consolidated performance also increased following the incorporation of affiliates and the reorganization of the business structure. SK Ecoplant's revenue last year was 12.1916 trillion KRW, and its operating profit was 315.9 billion KRW, an increase of 39.6% and 39.8% respectively compared to the previous year. In the first half of this year, it recorded 10.0504 trillion KRW in revenue and 1.465 trillion KRW in operating profit, up 82.2% and 584.2% respectively compared to the same period last year. However, on a separate basis for the second quarter of this year, it recorded an operating loss of 212.1 billion KRW.
SK Inc. plans to strengthen its competitiveness in the semiconductor and AI infrastructure business by bringing SK Ecoplant in as a wholly owned subsidiary. Once the off-market purchase is complete, it plans to proceed with a comprehensive share swap with the remaining shareholders, and the final financial burden will be determined based on the actual purchase volume and the terms of the share swap.