Choi Tae-won, chairman of SK Group, is selling shares of SK Inc. to raise 944 billion won for asset division. The value of SK Inc. shares has surged due to a semiconductor boom, allowing him to secure nearly 1 trillion won for the asset division with just a portion of his holdings, effectively alleviating a nine-year 'divorce risk.'
On October 2, SK Inc. announced that its largest shareholder, Choi, plans to sell 1,653,924 shares (2.3%). The total transaction size is 944 billion won, with 544 billion won being sold to strategic investors and the remaining 400 billion won through a price return swap (PRS) with securities firms.
Once the transaction is completed, Choi's holdings in SK Inc. will decrease from 12,975,472 shares to 11,321,548 shares. His ownership stake will drop from 17.8% to 15.5%, but he will maintain his status as the largest shareholder. Including related parties, his stake will decrease from 25.2% to 22.9%, still above 20%.
This share sale is a strategic move in anticipation of the asset division lawsuit between Choi and No So-young, director of the Art Center Nabi. In July, the Seoul High Court ruled that Choi must pay No 944 billion won in asset division. Choi has appealed the decision but has agreed not to contest 700 billion won of the total, seeking the Supreme Court's ruling only on the remaining 244 billion won.
Despite the ongoing legal proceedings, Choi's decision to secure the full 944 billion won is seen as a way to mitigate uncertainties related to the asset division and minimize management risks. By preparing for the maximum potential financial burden, he aims to reduce the impact of the prolonged divorce lawsuit on the group's operations.
The increase in SK Inc.'s share value has enabled Choi to raise significant cash with a smaller portion of his holdings. The stock price has risen sharply, driven by the expansion of the artificial intelligence (AI) semiconductor market and improved performance from SK Hynix. On April 16, 2024, the stock closed at 160,000 won, but by June 26 of this year, it had soared to 815,000 won.
The semiconductor supercycle has boosted the corporate value of SK Inc., allowing Choi to secure substantial cash with a reduced share sale. After this transaction, his stake in SK Inc. will remain at 15.5%, and including related parties, it will be 22.9%.
Initially, Choi's personal 29.4% stake in SK Siltron was also considered as a potential source for the asset division funds. In July, SK Inc. agreed to sell its 70.6% stake in SK Siltron to Doosan for approximately 2.3 trillion won.
Based on that transaction price, Choi's 29.4% stake would be valued at about 957.8 billion won, similar to the 944 billion won required for the asset division.
However, Choi opted to utilize a portion of his recently appreciated SK Inc. shares instead of SK Siltron. SK representatives stated that they could not comment on the decision as it pertains to Choi's personal stock holdings.
Market analysts suggest that the significant rise in SK Inc.'s stock price and the ability to secure necessary cash while maintaining his status as the largest shareholder were likely factors in this decision.
Meanwhile, an SK Inc. official stated, "Chairman Choi has comprehensively reviewed the transaction structure and scale to minimize the impact on the market and shareholders, ensuring stable management and continued responsibility as the largest shareholder. The ongoing legal proceedings will continue regardless of this share sale."
* This article has been translated by AI.
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