- SK Inc. to buyback KRW200 billion worth of its own shares in the next 6 months, marking the first step to implement the shareholders return policy
- The share buyback/cancellation program intends to improve shareholder value and strengthen the market confidence
SK Inc., the strategic investment arm of South Korea's SK group, announced that its Board of Directors, at a meeting held on August 30, authorized a KRW200 billion-share repurchase, which accounts for over 1% of the market cap, to enhance shareholders’ value.
SK Inc. plans to buy back its shares from the open market over a six-month period by entering a trustee agreement with a brokerage firm. Upon the expiration of the trust agreement, all repurchased shares will be cancelled to bolster shareholders’ value with the approval from a separate board meeting.
The share buyback decision dovetails with the shareholders’ return policy, which SK Inc. pledged to implement at the general meeting of shareholders in March 2022. At the last shareholder’s meeting, SK Inc. announced that it would use the fund for extra dividend to buyback over 1% of market cap, every year through to 2025, instead of increasing dividend payments. SK Inc. has distributed over 30% of its recurring dividend income to shareholders since 2018 and used its investment income to finance special dividends, raising its dividend per share from KRW5000 in 2018 to KRW8000 in 2021.
SK Inc. is committed to maximizing the total shareholder return (TSR) by aligning its shareholders’ return policy with investment performances. Notably, SK Inc. unveiled its vision for sustainable growth as an ESG-oriented value investor and has been accelerating its efforts to achieve it.
At the same time, SK Inc. has taken steps to empower the board to properly oversee and guide management and enhance shareholders’ rights. At end of 2021, the firm overhauled its Corporate Governance Charter to expand the scope of communication with shareholders and other stakeholders to include overall ESG management and required the shareholder communications director to report to the board.
“Despite the market uncertainty, SK Inc. has been sustaining growth momentum with a focus on four core businesses. Against this back, SK Inc. has decided to repurchase its own shares to ensure that investment returns will translate into greater shareholders’ value” said Sung-Hyung Lee, CFO of SK Inc. “By implementing shareholder-friendly policies over the medium and long-term, SK Inc. will solidify its position as a trusted leader in ESG.”