Review of JV establishment with a global chemical company
“Eco-friendly strategy dimension”
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SK Group is pushing ahead with a plan to sell a portion of SK Global Chemical, a subsidiary of the petrochemical business, to a global chemical company. This is to reduce the proportion of petrochemicals, a traditional chimney industry, and to adjust the overall business portfolio to the eco-friendly sector.
According to related industries on the 22nd, SK Innovation is promoting the sale of shares in SK Global Chemical, a wholly owned subsidiary. Strategic investors (SI) are being considered for sale, not financial investors (FI) who are seeking to simply purchase shares. It is a plan to sell SK Global Chemical shares to SI and establish a new joint venture (JV). To this end, SK Innovation selected JP Morgan as a sales advisor in November last year. SK said, “We are reviewing partnerships such as global SI and joint ventures,” and said, “It is in the early stages, and no specific plans have been decided.” It is known that SK Innovation has already tried to sell its stake in private contact with a global chemical company.
SK Global Chemical is engaged in basic material business for petrochemical products using naphtha produced in the process of refining crude oil by SK Energy. In 2019, it achieved sales of KRW 11,854.7 billion and operating profit of KRW 458.3 billion. Last year, on a cumulative basis in the third quarter, it generated sales of 6.6 trillion won, but lost 41.1 billion won. SK Global Chemical’s management right is owned by SK, and it is known that less than 49% of the stake for sale is considered.
The sale of SK Global Chemical’s stake is interpreted as part of the SK Group’s strategy to strengthen eco-friendly business. In addition, it is connected with the’Financial Story’ emphasized by SK Group Chairman Choi Tae-won. In order for a company to continue to grow, it is not only a numerical goal, but a growth direction that stakeholders can relate to. SK Innovation said, “Based on the financial story, we are considering the sale of the stake in order to raise financial resources for growth and enhance business synergy under the policy of’Green Balance 2030′, an eco-friendly reinforcement strategy.”
/ Reporter Han Jae-young [email protected]
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