SEOUL, March 30 (Korea Bizwire) — SK Innovation Co. said Thursday it is considering buying back its own stocks around the time when its battery-making subsidiary SK On Co. will go public in a bid to boost shareholders’ returns.
SK Innovation is looking at the buyback of its treasury stocks worth about 10 percent of its market capitalization through a tender offer, the energy unit under SK Group said in a regulatory filing.
SK Innovation will then allocate the stocks it owns in SK On to the shareholders who took part in the tender offer. It will cancel and retire the treasury shares.
SK Innovation’s market cap had stood at around 15.2 trillion won (US$11.6 billion) on the main KOSPI index as of Wednesday.
The company is considering a cash dividend of 2,000 won per share in the guideline for the fiscal 2024-2025 financial year.
SK On was split off from SK Innovation in October 2021 under SK’s broader plans to reshape the energy businesses into green energy sectors, including electric vehicle batteries and other advanced carbon-neutral materials.
SK On’s push for an IPO since the split-off lost steam amid unfavorable economic conditions that apparently put a damper on its efforts to attract investors.
Kim Jun, SK Innovation’s chief, said after a shareholders meeting last year the IPO is unlikely to take place for at least another two to three years.
SK On said in December last year it plans to raise 2.8 trillion won from SK Innovation and other private equity funds by issuing new shares.
On Tuesday, SK Innovation said in a filing that SK On will issue new shares worth 375.7 billion won as part of the financing plan.
Shares in SK Innovation soared 13.8 percent to close at 187,200 won on Thursday, versus the broader KOSPI’s 0.38 gain.