● SK chemicals is transforming itself into a holding company…
   laying the foundation for sustainable growth

- Enhancing management efficiency by reinforcing the specialty of each operating company
- The holding company will concentrate on management of subsidiaries and enhancing the business
   portfolio.
- Increasing shareholder value by reinforcing the transparency of the company and expanding
   responsible management



SK chemicals transforms itself into a holding company.

SK chemicals announced that it held a board meeting on June 21, and decided on ‘transformation into a holding company,’ i.e. splitting the organization into SK chemicals Holdings (tentative) and SK chemicals Operating Company (tentative). 48 years after its foundation (in 1969), SK chemicals reorganizes as a holding company.

Through the spin-off, SK chemicals will transform the surviving corporation into a holding company (SK chemicals Holdings), and establish a new company (SK chemicals Operating Company). As a result, SK chemicals Holdings will concentrate on management of subsidiaries and enhancing the business portfolio, and SK chemicals Operating Company will focus on improving the management efficiency of the existing chemical business and pharmaceutical business. The split ratio between the holding company and the operating company is 48 : 52.

The purposes of SK chemicals’ transformation into a holding company are to reinforce the expertise of each operating company and enhance management efficiency since its effort to improve its business portfolio since 2000 and the new high-value-added businesses have begun to produce results, and to reinforce the transparency of corporate management and expand responsible management by separating the investment function from the business function, and eventually increase shareholder values.

SK chemicals Holdings will turn into a holding company with subsidiaries like SK chemicals Operating Company (chemistry/pharmeceuticals), SK Gas and SKPlasma through takeover and in-kind contribution. As a result, each operating company will carry out independent responsible management in its own business areas, and SK chemicals Holdings will take charge of evaluating the management of each operating company and managing investment.. It will liquidate its equities in SK E&C (28.25%) together with SK Holdings within the specified period.

As the first step in preparing for transforming SK chemicals into a holding company, it decided to retire or sell all its treasury stocks. 8% of its treasury stocks (13.3%; 1,939,120 shares) were repurchased with the profit available for dividend payout. So the company decided to retire them according to the original intention of enhancing shareholder value.

The company is planning to sell the treasury stocks it acquired through mergers (5.3%; 1,297,483 shares), which the company cannot retire arbitrarily according to relevant laws, in the market. The funds coming from the sale will be used as the investment resources of the holding company and the operating companies and improve their financial structure.

The transformation into a holding company is expected to accelerate the growth of each operating company.

SK chemicals Operating Company will become a global leading company focused on high-value-added chemical materials like copolyester and bioenergy, and premium vaccines. SK chemicals Operating Company will also review the split of the chemical business and the pharmaceutical business.

SK Gas is planning to expand its business from energy distribution to LPG-based chemistry, and become a global leading energy/chemical company. SK Plasma is concentrating on its overseas-market-centered growth strategy based on development of new blood preparations.

Since the board of directors approved the split, SK chemicals will be split into a holding company and operating companies on December 1 after the general meeting of shareholders on October 27.

An SK chemicals insider said, “The transformation into a holding company is a decision to enhance business expertise and maximize management efficiency, and we are not considering separating it from the group.”




* 1.SK chemicals time table




* 2. SK chemicals holding company diagram