2023-06-26 12:41:17
© Archyde.com. [현장에서] “SK On IPO, 2025 at the earliest”… SK innovation paid-in capital increase conference call Q&A
A view of the SK Innovation headquarters located in Jongno-gu, Seoul. Provided = SK Group
[인포스탁데일리=허준범 기자] On the 26th, SK Innovation held a conference call related to the background of the paid-in capital increase.
SK Innovation has been experiencing growing pains such as large-scale expenditures and battery profitability issues amid a green business-oriented portfolio transition.
At the end of the first quarter of this year, SK Innovation’s debt ratio reached 200%, and its net debt reached 15.8 trillion won.
SK Innovation decided to inherit the bequest for the purpose of securing a financial structure necessary to accelerate the green business transformation and securing future growth engines and financial resources.
Through the attraction of SK On FI investors, it is concentrating its efforts on attracting regarding 2.8 trillion won of investment since the previous year. At the same time, asset efficiency besides the bequest is also being reviewed.
SK Innovation’s total paid-in capital increase amounted to KRW 1,177.7 billion. Of this fund, 400 billion won will be used for green business.
Specifically, it is divided into ▲Securing technology and business development for supplying carbon-free energy ▲Low-carbon energy production technology and commercialization investment through gasification of domestic waste ▲Securing technology related to carbon capture/storage and business development.
In addition, regarding 420 billion won was allocated to strengthen R&D, including the creation of a green campus in the Daejang district of Bucheon. In addition, it plans to inject 350 billion won to repay debts such as CP and corporate bonds.
For measures to enhance shareholder value, SK Innovation said, “We will accelerate SK On’s rapid profitability improvement, reflect the AMPC effect on local production in the U.S., and improve yields at overseas business sites.” ”he explained.
Q. Is the battery-related R&D infrastructure investment separate from the existing businesses of affiliates?
– The purpose of creating the Bucheon Daejang District Green Campus is to strengthen R&D capabilities in the battery business.
– Green Biz. Intensive development of SMR, hydrogen/ammonia technology, energy solutions, and waste-to-energy conversion to accelerate business.
– A business that is separate from business with other affiliates such as SKC.
Q. Is the new hydrogen business separate from the holding company’s hydrogen business?
– The holding company’s hydrogen business focuses on production/charging of green/blue hydrogen.
– Our company focuses on ammonia-related transportation/power generation.
– Ammonia is easier to transport compared to liquid hydrogen, so it is more advantageous for infrastructure expansion.
– Focus on ammonia rather than hydrogen.
Q. What are the details of investment related to domestic waste gasification?
– New businesses related to waste utilization do not simply utilize methane generated from waste.
– Municipal solid waste sorting/crushing -> gasification -> fuel synthesis -> synthetic fuel production (sustainable jet fuel, etc.).
Q. What are the details of the fund raising of 409.2 billion for the acquisition of securities by other corporations?
– Hydrogen and ammonia 92.4 billion / Domestic waste 224.4 billion / CCUS remaining amount
– Existence of unconfirmed items. However, at this point, some parts have been reflected in the investment plan in advance.
– Ammonia-related investments are investments in next-generation original technologies within the value chain.
– Participation in a fuel oil production project using gasification for waste-related investment.
– CCUS-related investment plans to participate in additional discovery and seeding investment for next-generation capture technology in addition to the current investment.
– Details will be additionally shared when they can be made public.
Q. How much will net debt of KRW 15.6 trillion at the end of 1Q be reduced by this paid-in capital increase?
– Significant reduction in net debt will occur.
– Cash inflow of more than KRW 1 trillion following completion of paid-in capital increase.
– SK On’s Pre-IPO fund inflow of KRW 1.7 trillion.
– However, it remains to be seen how the net debt will decrease in the future as CAPEX is in flux.
Q. Why did you choose paid-in capital increase even though you have funds?
– Sufficient cash holdings through SK Innovation’s consolidation.
– SK On secured sufficient funds through Pre-IPO, US Department of Energy ATVM, and borrowing from OEM partners.
– However, most of the cash is in the subsidiaries and for investing in the subsidiaries’ own businesses.
– SK Innovation’s own cash holdings are less than KRW 1 trillion, and through additional funds, Green Biz. Accelerate your transition.
Q. What are the financial soundness targets for 2023 and 2024 on a separate/consolidated basis?
– It is difficult to share internal goals for separate/consolidated financial soundness.
– Decided on paid-in capital increase to secure finance for future growth and prepare for external uncertainties.
Q. What is the priority among asset sales, borrowings, and bequests?
– In addition to capital increase, asset efficiency is being promoted at the same time to raise funds.
– As for asset efficiency, it is currently not possible to share in detail.
– Improving business profitability, including SK On, should also contribute to financial soundness.
Q. Is there any possibility of additional paid-in capital increase in 2023?
– No additional bequest plans at all.
Q. SK On secured funding by securing policy funds from the US government. Did the funding cause a change in the timing of the IPO promised to existing investors? Are there any changes in the backlog?
– No change in IPO timing. After 2025 at the earliest (following the market recognizes growth and profitability).
– Currently, SK On’s official order backlog is 2,000GWh, but it is expected to increase through collaboration with Hyundai Motor in the US.
Q. When is the expected timing of investment, recovery, and revenue recognition for the new business?
– The timing of revenue recognition and collection related to new business will be different for each investment case.
– Currently, it is difficult to predict the timing of investment recovery as investment projects are not in full bloom.
– Related investments are for technology/market preoccupation and timely entry from a long-term perspective.
– Investments to respond to the long-term decline in fossil fuel demand and strengthen future growth potential.
– Sales are expected to occur incrementally between 2025 and 2030.
Q. The market reacted positively following the announcement of the mid- to long-term shareholder return plan in March, but shareholders are disappointed with the current paid-in capital increase. How does paid-in capital increase relate to mid- to long-term shareholder return policies? Why do you think it benefits shareholders?
– Worried regarding the negative impact of paid-in capital increase.
– In addition to fundamental corporate value enhancement efforts, consider ways to enhance corporate value through various shareholder value enhancement measures.
– Regarding fundamental corporate value Considering SK On’s improved productivity at new overseas plants and the effect of AMPC in the US, we believe profitability issues, the root cause of corporate value undervaluation, are quickly being resolved.
– Efforts should be made to create an environment where SK On’s profitability will rapidly improve and its corporate value will be rapidly re-evaluated.
– The plan to enhance shareholder value proposed in March is a stock exchange between SK on and SK Innovation near the time of SK on’s IPO / execution of special dividends related to sales of old stocks following the IPO.
– The company is reviewing various measures, including the cancellation of treasury shares, to enhance shareholder value using treasury shares. Share following confirmation.
Reporter Heo Jun-beom jb_3heo@infostock.co.kr
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