SK ie technology sells entire loss-making Chinese subsidiary, expects improved financial structure and reduced losses
Full divestiture of loss-making subsidiary: SK ie technology decided to sell its entire 100% stake in Chinese subsidiary SK Hi-tech Battery Materials (Jiangsu) for 88.8 billion won (400 million CNY).
Background: The subsidiary recorded massive net losses in the past two consecutive years (approx. -86.6 billion won), becoming a financial burden.
Terms: The buyer was selected through competitive bidding. The sale price is about 23% of the subsidiary's total equity (383.1 billion won), a discount to book value.
Financial impact: The proceeds of 88.8 billion won represent 3.42% of SK ie technology's equity (2.6 trillion won). The funds will be used to improve financial structure and enhance operational efficiency of global bases.
Risk: The closing depends on fulfillment of customary conditions such as merger clearance in China, and may be delayed or fail.
[AI Overall Analysis]Divesting a loss-making subsidiary is a positive step to reduce losses and improve financial health in the long run. Although the sale price is significantly below book value, causing a short-term capital loss, it is expected to contribute to future profitability improvement.
KOSPI Filing Information
Filing: Decision on Disposal of Stocks and Investment Securities in Other Corporations