Key Takeaways
SKC Ltd. is raising 1.1671 trillion won ($786.6 million) in a rights offering to fund its next-generation semiconductor materials business and improve its financial structure.
"Despite difficult market conditions, shareholders and investors have shown strong confidence in SKC's recovery in core competitiveness and the future value of our next-generation glass substrate business," an SKC official said.
The chemical and materials company will issue 11.73 million new shares at a final price of 99,500 won each, a significant increase from the initial estimate of 70,600 won, reflecting a recent surge in the company's stock price.
The fundraising will secure the next three years of investment for its US-based glass substrate subsidiary, Absolics, while using the larger-than-expected proceeds to slash its debt ratio to 129 percent from 230 percent at the end of last year.
SKC, the chemical and materials arm of SK Group, will maintain its planned investment of 589.6 billion won in Absolics, which it deemed sufficient for the next three years of development. The increased size of the offering, driven by a rally in SKC's share price, allowed the company to allocate a larger portion to its balance sheet.
The amount designated for debt repayment was increased to 577.5 billion won, up from an initially planned 410 billion won. This move is expected to significantly improve key financial metrics and provide greater stability.
The successful offering was supported by a turnaround in SKC's performance and rising expectations for its semiconductor materials business. The company returned to profitability in the first quarter with an operating profit of 76.2 billion won, ending 10 consecutive quarters of losses.
Investor sentiment was also boosted by progress at Absolics, which recently supplied prototype glass substrates for next-generation network semiconductors to a US communications chip company. An SKC official noted the product is performing well in reliability evaluations, and mass production could begin within the year if it passes.
The successful capital raise provides SKC with a stable foundation to pursue commercialization of its high-stakes glass substrate technology, a key component for future AI and high-performance chips. Investors will be watching for the successful completion of the subscription period for existing shareholders on May 15, with the new shares scheduled to be listed on June 8.
This article is for informational purposes only and does not constitute investment advice.
