이 기사는 2021년 09월 16일 08:07 thebell 에 표출된 기사입니다.

SK Chemicals, part of South Korea’s SK Group, will carve out its utility division into a separate entity as the chemical company seeks to expand its integrated energy business.

The newly created entity, tentatively called SK Multi-Utility, will be wholly owned by SK Chemicals after the planned split-off, which is subject to shareholder approval at an extraordinary general meeting on October 25.

The split-off is aimed at growing the company’s integrated energy business. The decision was made “to increase the unit’s expertise, enhance management efficiency and actively respond to changes in global markets,” the company said in a regulatory filing on Monday.

The utility division – which supplies power and steam to SK affiliates’ facilities adjacent to its Ulsan plant – accounts for only a small portion of the company’s overall revenue. Nearly 95% of the total revenue comes from the company’s green chemicals division and life science division.

Revenues from the two main divisions accounted for 55.1% and 39.4% respectively of SK Chemicals’ total consolidated revenue of 1.2 trillion won in 2020, while the utility division generated revenue of only 37.3 billion won in the same period.

According to financial information disclosed in the filing, SK Chemicals and SK Multi-Utility will have total assets of 2 trillion won and 171.5 billion won after the split-off. What is notable is that the new entity will have more cash and cash equivalents (57 billion won) than its parent company (50.1 billion won).

This is apparently because of the need for future investments. SK Multi-Utility plans to spend 428 billion won on building new facilities to transform itself into an environmentally friendly business. “Existing coal-fired boilers need to be replaced to carbon neutral methods, which will also provide new business opportunities,” said an official at SK Chemicals.

The new entity’s debt-to-equity ratio will be only 9%, with only 14.3 billion won of the total liabilities of 814.3 billion won set to be handed over to SK Multi-Utility.

Some people expect SK Multi-Utility to follow in the footsteps of SK Bioscience, the drug-making arm of SK Chemicals that was split off in 2018 and went public on the Kospi in March this year. The stock price of SK Bioscience has since jumped after news that its Covid-19 vaccine entered a phase 3 trial, pushing its market capitalization above that of SK Chemicals.

SK Chemicals shares fell as much as 11% on Tuesday on news of the split-off, suggesting disappointment among investors who are concerned about being left out of a potentially positive outcome. However, many expect that the new entity’s potential listing is long way off given the size of the business and its uncertain growth potential. (Reporting by Eun-a Jo)