Sector News

SK Chemical to spin off chemical, pharmaceutical divisions

June 22, 2017
Energy & Chemical Value Chain

SK Chemical will adopt to a holding company system. Accordingly, a small holding company led by SK Chemical Vice Chairman Chey Chang-won, a cousin of SK Group Chairman Chey Tae-won, will be established in the group.

Vice Chairman Chey plans to turn SK Chemical, the largest business owned by him, into a holding company and considers a plan to spin off its chemical and pharmaceutical divisions in the future.

SK Chemical held its board meeting on June 21 and decided on the transition to a holding company which is divided into two units tentatively named SK Chemical Holdings and SK Chemical Business Corporation. The company will become a holding company for the first time in 48 years after its foundation in 1969.

Through an equity spin-off, the existing entity will turn into a holding company tentatively named SK Chemical Holdings, and the business operation will run by a newly established SK Chemical Business Corporation. Accordingly, SK Chemical Holdings will focus on managing its subsidiaries and advancing its business portfolios, while SK Chemical Business Corporation will focus on improving the management efficiency of existing chemical and pharmaceutical business units. The holding company and the business corporation will have the spin-off ratio of 48 to 52.

SK Chemical decided to implement the holding company system in order to strengthen its operating companies’ specialties and increase management efficiency as the company has continuously improved its business portfolios since 2000 and its new high-value added projects are about to achieve results.

SK Chemical Holdings will become a holding company which runs SK Chemical’s chemical and pharmaceutical units, SK Gas and SK Plasma as its subsidiaries through stockholder takeover bid and investment in kind in the future. Accordingly, each operating companies will be indigently operated on its own business ground. SK Chemical Holdings will be in charge of management evaluation and investment management of its operating companies. It also plans to sell its 28.25 percent share in SK Engineering & Construction (E&C) jointly owned with SK holdings C&C within a set period.

As the first step to turn into a holding company, SK Chemical decided to dispose and sell its entire treasury stocks. The company will dispose 8 percent, or 1.93 million shares, out of 13.3 percent in treasury stocks in order to improve the company’s shareholder value according to the original purpose. It bought the 8 percent share with profit available for dividends.

In addition, SK Chemical will sell its 5.3 percent share in treasury stocks, which were obtained through the merger and are banned from discretionally disposing according to relevant laws, in the market. The funds secured by the sale will be used to invest in the holding company and operating companies and improve the financial structure.

Each operating company is also expected to see its growth accelerates due to the transition to the holding company. SK Chemical Corporation will turn into a global leading company specializing in high value-added chemical materials, such as copolyester and bioenergy, and premium vaccines. It will also consider a spin-off of its chemical and pharmaceutical units in the future.

SK Gas plans to jump up to be a global energy and chemical company by expanding its business areas from energy distribution to LPG-based chemical sector.

SK Plasma focuses on the global market-centered growth strategy based on the development of new blood products.

With the approval of the board members at the meeting, SK Chemical will be divided into a holding company and operating companies on December 1 after holding a shareholders’ general meeting on October 27.

By Jung Min-hee

Source: Business Korea

comments closed

Related News

May 26, 2024

Borealis signs first Austrian wind and solar PPA with Burgenland Energie

Energy & Chemical Value Chain

Borealis has partnered with Austria-based wind and solar power producer and green tech solution provider Burgenland Energie on a power purchase agreement (PPA). Under the ten-year agreement, renewable electricity will be provided by a hybrid renewable energy park located in Nickelsdorf, Austria, which is owned by Burgenland Energie’s subsidiaries Nick Alpha and Wind PV Operation.

May 26, 2024

DuPont to split into three companies

Energy & Chemical Value Chain

DuPont de Nemours Inc. announced plans to split into three separate, publicly traded companies. The electronic materials and water business will become independent companies, with the remainder of the company to comprise New DuPont. The splits will be complete within 18 to 24 months, and do not require shareholder approval.

May 26, 2024

Olin hires new leader for chlor-alkali and vinyls business

Energy & Chemical Value Chain

Olin Corp. has hired Deon Carter as vice president and president/chlor-alkali products and vinyls, effective June 17. Carter was previously COO at Continental Industries Group, a position he took April 2023 after serving as president and CEO of Scientific Design Company.

How can we help you?

We're easy to reach