SEOUL: South Korea’s SK Innovation, parent of the country’s largest oil refiner and battery maker SK On, said on Tuesday (Aug 27) that shareholders had approved a merger with energy affiliate SK E&S as part of a major restructuring of the conglomerate.
The merger plan, announced last month, would create a 100 trillion won (US$75.35 billion) asset company, in an effort to shore up the finances of loss-making battery unit SK On by combining it with a profitable company that has a stronger balance sheet, analysts said.
The merger was approved by more than 85 per cent of shareholders attending the meeting, SK Innovation said in a statement, adding that 95 per cent of foreign shareholders at the meeting approved the merger plan.
The merged company will be launched on Nov 1.
Shares of SK Innovation rose as much as 5 per cent after the plan was approved, outperforming the benchmark KOSPI, which ended the morning down 0.5 per cent.
Unlisted SK E&S operates businesses including profitable city gas utilities and liquefied natural gas (LNG) power generation units. It reported a 1.3 trillion won (US$939.37 million) operating profit in 2023 and 11.2 trillion won in sales.
Battery maker SK On has never made a profit since it was split off from SK Innovation in late 2021. Lately, it has been struggling with a drop in electric vehicle battery shipments amid a global slowdown in EV sales.
SK Innovation reported a consolidated 1.9 trillion won operating profit in 2023, generating 77.3 trillion won in sales.
From: channelnewsasia
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