SK Group Chairman Chey Tae-won has sold approximately 944 billion won worth of shares in SK Inc. The sale is believed to be aimed at raising funds for the property division payment stemming from his divorce lawsuit with Noh So-young, director of the Art Center Nabi. The amount is equal to the property division payment set by a court in July.
According to the Financial Supervisory Service’s electronic disclosure system on the 5th, Chey sold 1,653,924 shares of SK Inc. in an after-hours block trade. He sold 972,493 shares at 559,387 won per share and the remaining 681,431 shares at 587,000 won each.
The sale reduced Chey’s personal holdings from 12,975,472 shares to 11,321,548. His stake fell by 2.27 percentage points, from 17.76% to 15.49%, but he remained the company’s largest shareholder.
Raising 544 billion won through a direct sale
Chey raised funds by combining a share sale with a derivative contract. He secured approximately 544 billion won of the total proceeds by transferring 972,493 shares to DFO, an investment fund of the family of Michael Dell, founder of U.S. technology company Dell Technologies.
The remaining approximately 400 billion won was raised through a three-year price return swap (PRS) contract with Korea Investment & Securities. The contract covers 681,431 shares of SK Inc.
A PRS is a transaction in which shares are sold to a securities firm to raise funds, with the parties later settling gains or losses arising from changes in the share price, as specified in the contract.
Under this contract, the amount remaining after costs are deducted from the proceeds of a future share sale will be compared with a predetermined reference price, and the difference will be settled. Chey may therefore have to bear additional losses or receive gains depending on the future share price, even though he has secured funds now.
SK Inc. disclosed its plan to sell shares on the 2nd of last month, stating that the transaction was intended to raise personal funds. At the time, the company said it would pursue the transaction in a way that minimized its impact on the stability of group management and the share price.
Property division payment reduced from 1.3808 trillion won to 944 billion won
The sale is connected to the divorce lawsuit between Chey and Noh. In December 2022, the court of first instance ordered Chey to pay Noh 66.5 billion won in property division and 100 million won in alimony.
In May 2024, the appellate court sharply increased the property division payment to 1.3808 trillion won. It included SK Inc. shares in the property subject to division and found that funds from the family of former President Roh Tae-woo had contributed to SK Group’s growth.
However, in October last year, the Supreme Court overturned the property division ruling and sent it back to the lower court, ruling that 30 billion won in slush funds from the former president’s family could not be recognized as a contribution to Noh’s acquisition of property. The rulings on the divorce and 2 billion won in alimony were finalized.
In July, the Seoul High Court’s Family Division 1 included SK Inc. shares in the property subject to division in its retrial, but set the amount payable to Noh at 944 billion won.
Chey appealed the ruling to the Supreme Court. He later narrowed the scope of his appeal, choosing not to contest 700 billion won of the property division payment and seeking the Supreme Court’s judgment only on the remaining 244 billion won.
Final amount still awaits Supreme Court ruling
With the share sale, Chey has raised funds equivalent to the amount ordered in the remand trial ruling.
The decision to set the sale at 944 billion won is interpreted as an effort to prepare for the property division payment. Rather than placing a large number of shares on the market all at once, Chey combined a sale to a strategic investor with a PRS contract.
Chey remains SK Inc.’s largest shareholder after the disposal. However, his personal stake has fallen to the 15% range because he sold some of his shares.
The transaction has secured funds needed for the property division payment, but the actual payment date and the final amount Chey will have to pay remain separate issues.