SK on, a subsidiary of SK Innovation, has initiated a rights offering to enhance its standing in the electric vehicle (EV) battery sector. On October 2, SK Innovation revealed that SK on plans to issue 18,031,337 common shares, which constitute 3.7% of the company’s total issued shares. The shares will be offered at an issue price of KRW 55,459 each, aiming to raise approximately KRW 1 trillion. The payment date for the new shares is set for October 15, with the distribution of share certificates scheduled for October 16.
This rights offering is part of a larger strategy to secure funding, with notable participation from financial institutions, including Korea Investment & Securities, Shinhan Bank, Shinhan Investment Corp., and KB Securities. These institutions will acquire the new shares through special purpose companies (SPCs) utilizing a price return swap (PRS) method, a financial derivative designed to manage the risk associated with fluctuations in the underlying asset’s price.
Under the PRS arrangement, if the stock’s value deviates from a specified standard price at the time of repurchase, the difference will be compensated. Should SK on’s stock price drop below the acquisition price upon investor sale, SK on will cover the loss; conversely, if the price rises, the financial firms will reimburse SK on for the increase. Despite experiencing a slowdown in profitability linked to a temporary decline in EV demand, SK on remains optimistic about its equity value in the long term as the market continues to evolve.
In a related development, SK Innovation announced its intention to acquire 4 million shares of SK enmove from Eco Solution Holdings, a subsidiary of IMM Credit Solution, for KRW 142.7 billion. This acquisition will increase SK Innovation’s ownership in SK enmove from 60% to 70%, further reinforcing its position within the organization.
IMM Credit Solution previously became the second-largest shareholder of SK enmove in April 2021 by acquiring a 40% stake for KRW 1.12 trillion.
