SK Global Will Be Under Court Receivership

Creditor group of SK Global announced that it would apply for court receivership for liquidation of SK Global.

This would create a possibility of SK Group being taken to pieces in case SK affiliates` shares held by SK Group and its Chairman Choi Tae-won are sold to the third party.

Hana Bank which is a major creditor bank of SK Global announced on May 28th at a creditor managing committee, “We decided to apply for court receivership with the condition of being liquidated since we could not accept management normalization measures presented by SK Global.”

In response, SK Group said, “The initial deadline to enter MOU with the creditors is June 18th, and we would be able to get another month extended. So, we would have enough time to discuss over this issue with the creditors.”

Hana Bank explained, “SK Corporation told us that it would turn its some 450 billion won worth of domestic bond sales and another 450 billion won worth of overseas bond sales into shares, but these are unacceptable.”

The creditors and SK Group have once temporarily agreed upon the amount of money to be changed to shares as 1 trillion won, but the board of directors of SK Corporation resisted the amount later saying, “The utmost money we can provide without affecting our normal sales activities would be 450 billion won at the maximum, not more than that.”

SK Corporation`s major shareholder Sovereign Asset Management and minor shareholders have announced so far that they would file a law suit against the board of directors in case SK Corporation provided excessive amount of funds, and SK Corporation complied to the demand.

The decision by the creditors to liquidate SK Global would make all of Chairman Choi` s shares to be sold off to compensate for creditors` losses. If SK Global which has been one of major SK affiliates gets liquidated with Mr. Choi losing his managing power, other major affiliates such as SK Telecom and SK Corporation would be likely to move faster to go on their own.

That might lead to the break-up of SK Group which has been ranked the 3rd in the business circle.

Joong-Hyun Park Do-Young Kim sanjuck@donga.com nirvana1@donga.com