SK Hynix has effectively become the largest shareholder of Kioxia, a Japanese NAND flash semiconductor company.
On August 11, Bloomberg reported that Kioxia disclosed in a public filing that its former largest shareholder, Toshiba, reduced its stake in Kioxia from 14.48% to 14.12% as of August 3. This change allowed BCPE Pangea Cayman 2, a special purpose vehicle (SPV) in which SK Hynix holds a 14.19% stake, to become the largest shareholder.
BCPE Pangea Cayman 2 was established in 2018 by the U.S. private equity firm Bain Capital to acquire Kioxia from Toshiba Memory, with SK Hynix also participating in the investment. However, last month, Bain Capital sold most of its stake in the SPV, allowing SK Hynix, as the second-largest shareholder, to ascend to the position of largest shareholder in BCPE Pangea Cayman 2.
Additionally, Kioxia noted that SK Hynix holds convertible bonds that can be converted into nearly all of the voting shares of BCPE Pangea Cayman 2, effectively making SK Hynix the largest shareholder of Kioxia.
In its annual performance report, Kioxia identified SK Hynix as a 'risk factor' due to potential conflicts of interest. However, SK Hynix has stated that it will not hold more than 15% of Kioxia's total voting rights without Kioxia's consent until 2028.
Moreover, Chey Tae-won, Chairman of SK Group, indicated during the Nikkei Forum held in Tokyo in June that he prefers collaboration over direct involvement in Kioxia's management.
Meanwhile, SK Hynix reported that its non-operating income from investment assets reached 63.27 trillion won in the second quarter, most of which is believed to stem from its investment in Kioxia. This figure exceeds SK Hynix's second-quarter operating profit of 60.54 trillion won.
* This article has been translated by AI.
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