Korea / Special Sits, Pairs, Index Rebalancing, Clepsydra Capital

Sanghyun Park

Korea / Special Sits, Pairs, Index Rebalancing

Clepsydra Capital

Investigate special situations, pairs, and index rebalancing trades in Korea.

Event-Driven

<h2>Change the articles of incorporation for stock dividends</h2><p>SK Innovation will hold an extraordinary general meeting of shareholders on September 16. The most important agenda for this general shareholders' meeting is to get shareholder approval for SK Innovation's spin-off announced on the 4th of this month.</p><div class="content-highlight">
<p><strong>But other things stand out as well.</strong></p>
<p><strong>That is, SK innovation is partially amending its articles of incorporation. And it wants to obtain shareholder approval for these amendments at this general meeting.</strong></p>
</div><section class="figure"><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/226/948/original/Screen+Shot+2021-08-30+at+5.39.42+PM.png?1630359625" class="editor-image img-responsive" data-smartkarma-image-id="226948"></figure></section><p>Among the amendments, the amendment to allow for stock dividends is attracting attention from the market. It is unusual for a Korean local company to insert a stock dividend clause (in addition to a cash dividend) in the articles of incorporation. In fact, a stock dividend itself is unfamiliar in Korea.</p><section class="figure"><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/226/949/original/Screen+Shot+2021-08-30+at+5.26.21+PM.png?1630360013" class="editor-image img-responsive" data-smartkarma-image-id="226949"></figure><p>Then, on the surface, it is interpreted that SK Innovation chose a stock dividend to reduce the backlash from shareholders following the spin-off because SK Innovation lacked cash and transferred most of its cash holdings to a new battery company.</p>
<section class="figure"><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/226/950/original/Screen+Shot+2021-08-30+at+5.53.24+PM.png?1630360549" class="editor-image img-responsive" data-smartkarma-image-id="226950"></figure></section></section>

Change the articles of incorporation for stock dividendsSK Innovation will hold an extraordinary general meeting of shareholders on September 16. The most important agenda for this general shareholders' meeting is to get shareholder approval for SK Innovation's spin-off announced on the 4th of this month.
But other things stand out as well.
That is, SK innovation is partially amending its articles of incorporation. And it wants to obtain shareholder approval for these amendments at this general meeting.
Among the amendments, the amendment to allow for stock dividends is attracting attention from the market. It is unusual for a Korean local company to insert a stock dividend clause (in addition to a cash dividend) in the articles of incorporation. In fact, a stock dividend itself is unfamiliar in Korea.Then, on the surface, it is interpreted that SK Innovation chose a stock dividend to reduce the backlash from shareholders following the spin-off because SK Innovation lacked cash and transferred most of its cash holdings to a new battery company.


SK Innovation's Unusual Attempt to Change the Articles of Incorporation for Stock Dividends

Pan-Asia Index Rebalances/ Events/ Delta One, Periscope Analytics

Brian Freitas

Pan-Asia Index Rebalances/ Events/ Delta One

Quantitative Analysis

<div><p>The Asia Short Interest weekly looks at moves in market wide short interest and highlights movements in stock specific short interest across Hong Kong, Japan, Korea and Taiwan using the last available data published by the relevant authorities.</p></div><div><p>Hong Kong saw shorts rise on <a href="https://www.smartkarma.com/entities/meituan-dianping" target="_blank" data-smartkarma-citation="entities:26970:1" rel="noopener">Meituan (3690 HK)</a>, <a href="https://www.smartkarma.com/entities/geely-automobile-holdings-ltd" target="_blank" data-smartkarma-citation="entities:127:1" rel="noopener">Geely Auto (175 HK)</a>, <a href="https://www.smartkarma.com/entities/postal-savings-bank-of-china" target="_blank" data-smartkarma-citation="entities:22848:1" rel="noopener">Postal Savings Bank of China (1658 HK)</a>, <a href="https://www.smartkarma.com/entities/cansino-biologics-inc" target="_blank" data-smartkarma-citation="entities:27739:1" rel="noopener">CanSino Biologics Inc (6185 HK)</a> and <a href="https://www.smartkarma.com/entities/zhongan-online-p-c-insurance-co-ltd" target="_blank" data-smartkarma-citation="entities:23681:1" rel="noopener">ZhongAn Online P&amp;C Insurance (6060 HK)</a> while there was short covering on <a href="https://www.smartkarma.com/entities/ping-an-insurance-grp-co-of-china-ltd" target="_blank" data-smartkarma-citation="entities:12880:1" rel="noopener">Ping An Insurance (H) (2318 HK)</a>, <a href="https://www.smartkarma.com/entities/beijing-kuaishou-technology-co-ltd" target="_blank" data-smartkarma-citation="entities:29725:1" rel="noopener">Kuaishou Technology (1024 HK)</a>, <a href="https://www.smartkarma.com/entities/netease" target="_blank" data-smartkarma-citation="entities:29030:1" rel="noopener">NetEase (9999 HK)</a>, <a href="https://www.smartkarma.com/entities/country-garden-services-holdings-company-limited" target="_blank" data-smartkarma-citation="entities:27343:1" rel="noopener">Country Garden Services Holdings (6098 HK)</a> and <a href="https://www.smartkarma.com/entities/china-overseas-land-invest" target="_blank" data-smartkarma-citation="entities:419:1" rel="noopener">China Overseas Land &amp; Investment Ltd (688 HK)</a>. Shorts increased in the Consumer Discretionary, Health Care, Information Technology and Financials sectors while decreasing in the Communication Services, Real Estate and Consumer Staples sectors.</p></div><div><p>In Japan, stocks increased on <a href="https://www.smartkarma.com/entities/japan-post-bank-co-ltd" target="_blank" data-smartkarma-citation="entities:838:1" rel="noopener">Japan Post Bank (7182 JP)</a>, <a href="https://www.smartkarma.com/entities/toshiba-corp" target="_blank" data-smartkarma-citation="entities:637:1" rel="noopener">Toshiba Corp (6502 JP)</a>, <a href="https://www.smartkarma.com/entities/yaskawa-electric-corp" target="_blank" data-smartkarma-citation="entities:2458:1" rel="noopener">Yaskawa Electric (6506 JP)</a>, <a href="https://www.smartkarma.com/entities/odakyu-electric-railway-co-ltd" target="_blank" data-smartkarma-citation="entities:5405:1" rel="noopener">Odakyu Electric Railway (9007 JP)</a> and <a href="https://www.smartkarma.com/entities/mitsui-osk-lines-ltd" target="_blank" data-smartkarma-citation="entities:20717:1" rel="noopener">Mitsui Osk Lines (9104 JP)</a> while there was short covering on <a href="https://www.smartkarma.com/entities/freee-kk" target="_blank" data-smartkarma-citation="entities:28424:1" rel="noopener">freee (4478 JP)</a>, <a href="https://www.smartkarma.com/entities/sharp-corp" target="_blank" data-smartkarma-citation="entities:391:1" rel="noopener">Sharp Corp (6753 JP)</a>, <a href="https://www.smartkarma.com/entities/kawasaki-kisen-kaisha-ltd" target="_blank" data-smartkarma-citation="entities:3548:1" rel="noopener">Kawasaki Kisen Kaisha (9107 JP)</a>, <a href="https://www.smartkarma.com/entities/nabtesco-corp" target="_blank" data-smartkarma-citation="entities:13176:1" rel="noopener">Nabtesco Corp (6268 JP)</a> and <a href="https://www.smartkarma.com/entities/tokyo-electric-power-co-inc" target="_blank" data-smartkarma-citation="entities:15457:1" rel="noopener">Tokyo Electric Power Co (9501 JP)</a>. Shorts increased in the Industrials, Financials and Information Technology sectors.</p></div><div><p>In Korea, shorts increased on <a href="https://www.smartkarma.com/entities/ncsoft-corp" target="_blank" data-smartkarma-citation="entities:5169:1" rel="noopener">NCSOFT Corp (036570 KS)</a>, <a href="https://www.smartkarma.com/entities/netmarble-corporation" target="_blank" data-smartkarma-citation="entities:22839:1" rel="noopener">Netmarble Corporation (251270 KS)</a>, <a href="https://www.smartkarma.com/entities/db-hitek-co-ltd" target="_blank" data-smartkarma-citation="entities:18926:1" rel="noopener">DB Hitek Co., Ltd. (000990 KS)</a>, <a href="https://www.smartkarma.com/entities/sk-telecom-co-ltd-bbccd86c-474d-4a4d-946d-10e911a225a2" target="_blank" data-smartkarma-citation="entities:395:1" rel="noopener">SK Telecom (017670 KS)</a> and <a href="https://www.smartkarma.com/entities/samsung-electronics-co-ltd" target="_blank" data-smartkarma-citation="entities:191:1" rel="noopener">Samsung Electronics (005930 KS)</a> while shorts were covered on <a href="https://www.smartkarma.com/entities/amorepacific-corp" target="_blank" data-smartkarma-citation="entities:20854:1" rel="noopener">Amorepacific Corp (090430 KS)</a>, <a href="https://www.smartkarma.com/entities/kakao-corp" target="_blank" data-smartkarma-citation="entities:15002:1" rel="noopener">Kakao Corp (035720 KS)</a>, <a href="https://www.smartkarma.com/entities/sk-innovation-co-ltd" target="_blank" data-smartkarma-citation="entities:1268:1" rel="noopener">SK Innovation (096770 KS)</a>, <a href="https://www.smartkarma.com/entities/lg-household-health-care" target="_blank" data-smartkarma-citation="entities:6501:1" rel="noopener">LG Household &amp; Health Care (051900 KS)</a> and <a href="https://www.smartkarma.com/entities/kt-corp" target="_blank" data-smartkarma-citation="entities:1112:1" rel="noopener">KT Corp (030200 KS)</a>.</p></div><div><p>In Taiwan, shorts increased on <a href="https://www.smartkarma.com/entities/yageo-corporation" target="_blank" data-smartkarma-citation="entities:13212:1" rel="noopener">Yageo Corporation (2327 TT)</a>, <a href="https://www.smartkarma.com/entities/mediatek-inc" target="_blank" data-smartkarma-citation="entities:772:1" rel="noopener">Mediatek Inc (2454 TT)</a>, <a href="https://www.smartkarma.com/entities/evergreen-marine-corp-ltd" target="_blank" data-smartkarma-citation="entities:15428:1" rel="noopener">Evergreen Marine Corp (2603 TT)</a>, <a href="https://www.smartkarma.com/entities/innolux-corp" target="_blank" data-smartkarma-citation="entities:4509:1" rel="noopener">Innolux Corp (3481 TT)</a> and <a href="https://www.smartkarma.com/entities/nuvoton-technology-corp" target="_blank" data-smartkarma-citation="entities:15913:1" rel="noopener">Nuvoton Technology (4919 TT)</a> while shorts covered on <a href="https://www.smartkarma.com/entities/taiwan-cement" target="_blank" data-smartkarma-citation="entities:19736:1" rel="noopener">Taiwan Cement (1101 TT)</a>, <a href="https://www.smartkarma.com/entities/ctbc-financial-holding-co-ltd" target="_blank" data-smartkarma-citation="entities:436:1" rel="noopener">Ctbc Financial Holding (2891 TT)</a>, <a href="https://www.smartkarma.com/entities/yang-ming-marine-transport" target="_blank" data-smartkarma-citation="entities:8502:1" rel="noopener">Yang Ming Marine Transport (2609 TT)</a>, <a href="https://www.smartkarma.com/entities/nanya-technology-corp" target="_blank" data-smartkarma-citation="entities:3269:1" rel="noopener">Nanya Technology (2408 TT)</a> and <a href="https://www.smartkarma.com/entities/wan-hai-lines-ltd" target="_blank" data-smartkarma-citation="entities:14262:1" rel="noopener">Wan Hai Lines (2615 TT)</a>.</p></div>

The Asia Short Interest weekly looks at moves in market wide short interest and highlights movements in stock specific short interest across Hong Kong, Japan, Korea and Taiwan using the last available data published by the relevant authorities.Hong Kong saw shorts rise on Meituan (3690 HK), Geely Auto (175 HK), Postal Savings Bank of China (1658 HK), CanSino Biologics Inc (6185 HK) and ZhongAn Online P&amp;C Insurance (6060 HK) while there was short covering on Ping An Insurance (H) (2318 HK), Kuaishou Technology (1024 HK), NetEase (9999 HK), Country Garden Services Holdings (6098 HK) and China Overseas Land &amp; Investment Ltd (688 HK). Shorts increased in the Consumer Discretionary, Health Care, Information Technology and Financials sectors while decreasing in the Communication Services, Real Estate and Consumer Staples sectors.In Japan, stocks increased on Japan Post Bank (7182 JP), Toshiba Corp (6502 JP), Yaskawa Electric (6506 JP), Odakyu Electric Railway (9007 JP) and Mitsui Osk Lines (9104 JP) while there was short covering on freee (4478 JP), Sharp Corp (6753 JP), Kawasaki Kisen Kaisha (9107 JP), Nabtesco Corp (6268 JP) and Tokyo Electric Power Co (9501 JP). Shorts increased in the Industrials, Financials and Information Technology sectors.In Korea, shorts increased on NCSOFT Corp (036570 KS), Netmarble Corporation (251270 KS), DB Hitek Co., Ltd. (000990 KS), SK Telecom (017670 KS) and Samsung Electronics (005930 KS) while shorts were covered on Amorepacific Corp (090430 KS), Kakao Corp (035720 KS), SK Innovation (096770 KS), LG Household &amp; Health Care (051900 KS) and KT Corp (030200 KS).In Taiwan, shorts increased on Yageo Corporation (2327 TT), Mediatek Inc (2454 TT), Evergreen Marine Corp (2603 TT), Innolux Corp (3481 TT) and Nuvoton Technology (4919 TT) while shorts covered on Taiwan Cement (1101 TT), Ctbc Financial Holding (2891 TT), Yang Ming Marine Transport (2609 TT), Nanya Technology (2408 TT) and Wan Hai Lines (2615 TT).

Asia Shorts: Meituan, Geely, Kuaishou, COLI, Toshiba, Freee, NCSOFT, SK Tel, Yang Ming, Wan Hai, EMC

Pan-Asia Catalysts/Events, Quiddity Advisors

David Blennerhassett

Pan-Asia Catalysts/Events

Quiddity Advisors

Last Week in Event SPACE:  Afterpay, SPH, ESR Cayman, Prosus/Naspers, Kingsoft, Milton, SOHO China

Korea/Asia, Events, IPOs, Douglas Research Advisory

Douglas Kim

Korea/Asia, Events, IPOs

<div class="content-highlight">
<p data-testid="paragraph-0"><a href="https://www.smartkarma.com/entities/sk-innovation-co-ltd" target="_blank" data-smartkarma-citation="entities:1268:1" rel="noopener">SK Innovation (096770 KS)</a> confirmed today that it plans to <a href="https://www.reuters.com/business/energy/sk-innovation-expects-h2-refining-margins-gradually-improve-demand-rebounds-2021-08-03/" target="_blank" rel="noopener">split-off</a> its battery unit business. The company mentioned that it will separate out its battery and oil &amp; gas production businesses into individual units by October. These new companies would continue to be owned by SK Innovation. SK Innovation first mentioned in July that it is considering on splitting off its battery unit business and today's announcement is a confirmation of this initial  consideration.</p>
<p data-testid="paragraph-0">On September 16th, there will be an EGM to finally approve the formation of two new corporations including <strong>SK Battery Co</strong> (tentative name) and<strong> SK E&amp;P Corp</strong> (tentative name) which are expected to be officially launched on October 1st. </p>
<p>In our view, it appears that the market has mostly discounted the potential negative impact of the split-off the battery business which now has been confirmed. SK Innovation first hinted that it may split-off the battery business on July 1st. Since then, SK Innovation's share price has declined 17.6%. SK Innovation's market cap has declined by 4.8 trillion won in this period. It is fair to say that the market has overreacted to this potential split-off.</p>
<p>Now that the split-off has actually been announced, this could lead to reduced selling of SK Innovation as many investors see that the split-off could add long-term value for SK Battery and SK Innovation. </p>
</div>


SK Innovation (096770 KS) confirmed today that it plans to split-off its battery unit business. The company mentioned that it will separate out its battery and oil &amp; gas production businesses into individual units by October. These new companies would continue to be owned by SK Innovation. SK Innovation first mentioned in July that it is considering on splitting off its battery unit business and today's announcement is a confirmation of this initial  consideration.
On September 16th, there will be an EGM to finally approve the formation of two new corporations including SK Battery Co (tentative name) and SK E&amp;P Corp (tentative name) which are expected to be officially launched on October 1st. 
In our view, it appears that the market has mostly discounted the potential negative impact of the split-off the battery business which now has been confirmed. SK Innovation first hinted that it may split-off the battery business on July 1st. Since then, SK Innovation's share price has declined 17.6%. SK Innovation's market cap has declined by 4.8 trillion won in this period. It is fair to say that the market has overreacted to this potential split-off.
Now that the split-off has actually been announced, this could lead to reduced selling of SK Innovation as many investors see that the split-off could add long-term value for SK Battery and SK Innovation. 


SK Innovation: To Split SK Battery & SK E&P Business Units

<h2>Split overview</h2><p>SK Innovation held a board meeting today and announced that it had decided to spin out (physical division) the battery business and the petroleum development (E&amp;P) business, respectively.</p><div class="content-highlight"><p><strong>The new corporations 'SK Battery Co., Ltd. (tentative name)' and 'SK E&amp;P Co., Ltd. (tentative name)' are scheduled to be officially launched on October 1 after getting shareholder approval on September 16.</strong></p></div><p>After the split, there will be three companies in total. SK innovation will remain as a listed corporation, which plans to conduct R&amp;D, business development, and M&amp;As as a holding company. The two new companies will become unlisted corporations. An overview of each company is as follows.</p><table class="table table-striped"><tbody>
<tr><td colspan="4" style="width: 25%;">Company overviews</td></tr>
<tr>
<td style="width: 25%;">Type</td>
<td style="width: 25%;">Surviving corporation</td>
<td style="width: 25%;">Spinoff company 1</td>
<td style="width: 25%;">Spinoff company 2</td>
</tr>
<tr>
<td style="width: 25%;">Name</td>
<td style="width: 25%;"><strong>SK Innovation Co., Ltd.</strong></td>
<td style="width: 25%;"><strong>SK Battery Co., Ltd.</strong></td>
<td style="width: 25%;"><strong>SK ENP Co., Ltd. </strong></td>
</tr>
<tr>
<td style="width: 25%;">Business area</td>
<td style="width: 25%;">All businesses except those subject to the spin-offs that are transferred to the new companies according to the spin-off plan</td>
<td style="width: 25%;">Battery business, including secondary battery business, e-mobility business, and ESS business</td>
<td style="width: 25%;">Overseas E&amp;P business and LNG-related businesses</td>
</tr>
<tr><td colspan="4" style="width: 25%;">Source: DART</td></tr>
</tbody></table><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/222/019/original/Screen+Shot+2021-08-03+at+10.39.14+PM.png?1628044771" class="editor-image img-responsive" data-smartkarma-image-id="222019"></figure><div class="content-highlight"><p><strong>This split is a physical division (or a simple spinout) that SK Innovation owns 100% of the new corporations. Therefore, a split ratio is not calculated.</strong></p></div><p>The following are the financials of each company as of March 31, 2021. More debt was transferred to SK Battery than initially expected. It is evident that SK Innovation intends to utilize the financing through the listing of SK Battery as a recapitalization of the entire company.</p><table class="table table-striped">
<colgroup>
<col width="100">
<col width="100">
<col width="100">
<col width="100">
</colgroup>
<tbody>
<tr><td colspan="4" rowspan="1" data-sheets-value='{"1":2,"2":"Financials"}'>Financials</td></tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Name"}'>Name</td>
<td style="text-align: right;" data-sheets-value='{"1":2,"2":"SK Innovation Co., Ltd."}'>SK Innovation Co., Ltd.</td>
<td style="text-align: right;" data-sheets-value='{"1":2,"2":"SK Battery Co., Ltd."}'>SK Battery Co., Ltd.</td>
<td style="text-align: right;" data-sheets-value='{"1":2,"2":"SK ENP Co., Ltd."}'><div><div>SK ENP Co., Ltd.</div></div></td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"1Q21 assets"}'>1Q21 assets</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":15880.741732131}' data-sheets-numberformat='{"1":2,"2":"₩#,##0.0B"}'>₩15,880.7B</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":4630.887470696}' data-sheets-numberformat='{"1":2,"2":"₩#,##0.0B"}'>₩4,630.9B</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":771.093058802}' data-sheets-numberformat='{"1":2,"2":"₩#,##0.0B"}'>₩771.1B</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"1Q21 liabilities"}'>1Q21 liabilities</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":2054.321132037}' data-sheets-numberformat='{"1":2,"2":"₩#,##0.0B"}'>₩2,054.3B</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":2504.424587866}' data-sheets-numberformat='{"1":2,"2":"₩#,##0.0B"}'>₩2,504.4B</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":96.702765349}' data-sheets-numberformat='{"1":2,"2":"₩#,##0.0B"}'>₩96.7B</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"1Q21 equity"}'><strong>1Q21 equity</strong></td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":13826.420600094}' data-sheets-numberformat='{"1":2,"2":"₩#,##0.0B"}'><strong>₩13,826.4B</strong></td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":2126.46288283}' data-sheets-numberformat='{"1":2,"2":"₩#,##0.0B"}'><strong>₩2,126.5B</strong></td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":674.390293453}' data-sheets-numberformat='{"1":2,"2":"₩#,##0.0B"}'><strong>₩674.4B</strong></td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"FY2020 sales"}'><strong>FY2020 sales</strong></td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":2156.034428388}' data-sheets-numberformat='{"1":2,"2":"₩#,##0.0B"}'><strong>₩2,156.0B</strong></td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":1592.944329042}' data-sheets-numberformat='{"1":2,"2":"₩#,##0.0B"}'><strong>₩1,592.9B</strong></td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":59.268989295}' data-sheets-numberformat='{"1":2,"2":"₩#,##0.0B"}'><strong>₩59.3B</strong></td>
</tr>
<tr><td colspan="4" rowspan="1" data-sheets-value='{"1":2,"2":"Source: DART"}'>Source: DART</td></tr>
</tbody>
</table><p>The future schedule is as follows. Since this event is a simple physical division, minority shareholders are not entitled to stock appraisal rights. However, they are granted the right to object to this division in shareholders' meeting, and the extraordinary general meeting is scheduled for September 16.</p><table class="table table-striped">
<colgroup>
<col width="100">
<col width="100">
</colgroup>
<tbody>
<tr><td colspan="2" rowspan="1" data-sheets-value='{"1":2,"2":"Schedule"}'>Schedule</td></tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Board resolution"}'>Board resolution</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":44411}' data-sheets-numberformat='{"1":5,"2":"mm. dd","3":1}'>08. 03</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Shareholder meeting"}'><strong>Shareholder meeting</strong></td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":44455}' data-sheets-numberformat='{"1":5,"2":"mm. dd","3":1}'><strong>09. 16</strong></td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Split record date"}'>Split record date</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":44470}' data-sheets-numberformat='{"1":5,"2":"mm. dd","3":1}'>10. 01</td>
</tr>
<tr><td colspan="2" rowspan="1" data-sheets-value='{"1":2,"2":"Source: DART"}'>Source: DART</td></tr>
</tbody>
</table>

Split overviewSK Innovation held a board meeting today and announced that it had decided to spin out (physical division) the battery business and the petroleum development (E&amp;P) business, respectively.The new corporations 'SK Battery Co., Ltd. (tentative name)' and 'SK E&amp;P Co., Ltd. (tentative name)' are scheduled to be officially launched on October 1 after getting shareholder approval on September 16.After the split, there will be three companies in total. SK innovation will remain as a listed corporation, which plans to conduct R&amp;D, business development, and M&amp;As as a holding company. The two new companies will become unlisted corporations. An overview of each company is as follows.
Company overviews

Type
Surviving corporation
Spinoff company 1
Spinoff company 2


Name
SK Innovation Co., Ltd.
SK Battery Co., Ltd.
SK ENP Co., Ltd. 


Business area
All businesses except those subject to the spin-offs that are transferred to the new companies according to the spin-off plan
Battery business, including secondary battery business, e-mobility business, and ESS business
Overseas E&amp;P business and LNG-related businesses

Source: DART
This split is a physical division (or a simple spinout) that SK Innovation owns 100% of the new corporations. Therefore, a split ratio is not calculated.The following are the financials of each company as of March 31, 2021. More debt was transferred to SK Battery than initially expected. It is evident that SK Innovation intends to utilize the financing through the listing of SK Battery as a recapitalization of the entire company.







Financials

Name
SK Innovation Co., Ltd.
SK Battery Co., Ltd.
SK ENP Co., Ltd.


1Q21 assets
₩15,880.7B
₩4,630.9B
₩771.1B


1Q21 liabilities
₩2,054.3B
₩2,504.4B
₩96.7B


1Q21 equity
₩13,826.4B
₩2,126.5B
₩674.4B


FY2020 sales
₩2,156.0B
₩1,592.9B
₩59.3B

Source: DART

The future schedule is as follows. Since this event is a simple physical division, minority shareholders are not entitled to stock appraisal rights. However, they are granted the right to object to this division in shareholders' meeting, and the extraordinary general meeting is scheduled for September 16.





Schedule

Board resolution
08. 03


Shareholder meeting
09. 16


Split record date
10. 01

Source: DART



SK Innovation Split Overview & Implications

South Korea

SK Innovation Co., Ltd. refines, markets, and distributes oil.  The Company produces a variety of petroleum products, such as gasoline, kerosene, liquefied petroleumgas (LPG), and diesel oil.  SK Energy also manufactures petrochemical p roducts, including paraxylene, synthetic resins, styrene monomer, and ethylene.

Price Gauge
52-week Range	0.00 - 0.00
Market Cap (USDm)	0.00
P/E	0.00
Dividend (Yield)	0.00

SK Innovation (096770 KS)

SK Innovation's Unusual Attempt to Change the Articles of Incorporation for Stock Dividends

This post investigates and discusses SK Innovation's attempt to change the articles of incorporation to allow for stock dividends in the upcoming...

Sanghyun Park

Asia Shorts: Meituan, Geely, Kuaishou, COLI, Toshiba, Freee, NCSOFT, SK Tel, Yang Ming, Wan Hai, EMC

The Insight looks at large short interest movements across HK, Japan, Korea and Taiwan stocks and highlights large increases/decreases in shorts to...

Brian Freitas

Last Week in Event SPACE: Afterpay, SPH, ESR Cayman, Prosus/Naspers, Kingsoft, Milton, SOHO China

The weekend is here! Pour yourself a coffee, grab a comfortable seat, and sift through a brief summary of insights on various events discussed...

David Blennerhassett

SK Innovation: To Split SK Battery & SK E&P Business Units

Now that the split-off of SK Battery has been announced, this could lead to reduced selling of SK Innovation as many investors see that the split...

Douglas Kim

SK Innovation Split Overview & Implications

SK Innovation officially announced a spinout (physical division) plan for the battery and petroleum development businesses. This post details the...

Sanghyun Park

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)