이 기사는 2022년 02월 14일 08:04 thebell 에 표출된 기사입니다.

SK Siltron is seeking to raise funds in its first bond issuance of this year.

SK Group’s silicon wafer affiliate launched bookbuilding process on Thursday to raise a total of 170 billion won ($142 million), according to industry sources. The bonds are composed of a 130 billion won bond with a three-year maturity and a 40 billion won environmental, social, and governance (ESG) bond with a five-year maturity.

SK Securities and NH Investment & Securities will be lead managers to sell the bonds on February 17.

The issue amount would be increased up to 300 billion won if the deal attracts enough bids in the bookbuilding session. The proceeds are expected to be used to repay existing debt worth 200 billion won that matures on February 18. The 40 billion won of proceeds from the sale of five-year bond will be used to invest in SK Siltron CSS, a subsidiary of SK Siltron USA.

This marks SK Siltron’s first green bond issuance since its establishment. The green bond received the highest possible GB1 rating from Korea Investors Service last month.

“The reduction of greenhouse gas emission is expected through the production of semiconductor power components for electric vehicles (EV),” the credit rating agency said.

SK Siltron is facing growing pressure due to massive facility expansion and acquisition. The company spent about 1.7 trillion won on capital expenditure from 2017 to 2020 and $450 million on acquiring the silicon carbide (SiC) wafer business from US-based DuPont last year.

The company’s net borrowings increased 6.8 times from 220 billion won at the end of 2017 to 1.46 trillion won at the end of September 2021. The ratio of total borrowings-to-total assets was 53.2% in September 2021, with net debt-to-earnings before interest, taxes, depreciation, and amortization (EBITDA) standing at 2.4 times.

The borrowings are expected to increase amid the firm’s plan to expand production facilities. The SiC wafer production business is unlikely to generate high profits in the near term as it is in the early stages.

SK Siltron, however, is expected to keep generating cash thanks to its strong presence in the global semiconductor wafer market and the booming memory chip industry. The company delivered 1.34 trillion won in revenue in the first nine months of 2021, up 5.1% from a year earlier. Its operating profit margin rose to 16.2% from 7.6% in the fourth quarter of 2020.

South Korea’s three credit rating agencies have assigned a credit rating A0 to SK Siltron with a stable outlook. The company has issued bonds every year since 2017 except for last year. (Reporting by Ji-won Kim)