- Submitted a security registration statement and decided the size and the timeline for the offering on April 3rd
- Plans to offer about 12.77 million common shares and suggested KRW 101,000 to KRW 122,000 per share as the offer price
SEOUL, South Korea, April 5, 2018 /PRNewswire/ -- SK Lubricants, SK Innovation's wholly owned subsidiary for the base oil and lubricants business, announced that the company submitted a security registration statement to the Financial Supervisory Service and will begin arrangements for a public offering on April 3rd.
The company developed a Group III base oil, YUBASE®, through its own technology in 1995. Since then, it has produced and sold premium base oil and lubricants in 50 countries around the world. As a main ingredient, base oil makes up 80% of lubricants.
SK Lubricants is the 3rd largest in the global base oil market in terms of market share while it holds 39.3% of market share in the premium base oil(Group III), maintaining its lead. Over the past few years, Group III base oil market has been growing 8.9% (2013~17 CAGR) due to stricter environmental regulations in the world including the U.S. and Europe.
Through the public offering, the company will issue 12,765,957 common shares (face value of a share is KRW 2,500) with the ratio of secondary offering to new shares 8 to 2. The offer price it suggested is KRW 101,000 to KRW 122,000 per share. The total offering is valued at around KRW 1.2 to KRW 1.5 trillion.
On April 2nd, SK Innovation held a board meeting and the board of directors decided to offer 10,212,766 out of its existing 40,000,000 SK Lubricants' shares as secondary shares. SK Lubricants held its board meeting on the same day and the board resolved to issue 2,553,191 new shares. The number of shares offered to the public accounts for 30% of the company's total shares.
Following the submission of the security registration statement, the company plans to decide the offer price by forecasting the demand, submit a final security registration statement and begin the offering in mid-May.
According to the industry, the market value of SK Lubricants is KRW 5 trillion to KRW 6 trillion based on the company's capability of generating cash flow of KRW 600 billion a year (2017 EBITDA: KRW 585.7 billion), its financial health that almost doesn't necessitate the company to borrow loan and its high return on equity (2017 ROE: 23.5%).
Last year, SK Lubricants achieved revenues of KRW 3.4495 trillion and operating income of KRW 504.9 billion, and has maintained 13.5% of operating income growth on average for the past three years.