SK Inc. to cancel all treasury shares worth 4.8 trillion won, largest move ever by a holding company

[Financial News] SK Inc. will cancel treasury shares worth 4.8 trillion won, the largest amount ever among holding companies. This represents roughly 20% of all outstanding shares, an unprecedented scale. SK Inc. said it plans to use the recent amendment to the Commercial Act of the Republic of Korea as an opportunity to maximize shareholder value.
On the 10th, SK Inc. held a board meeting and abruptly announced that it had decided to cancel all of its treasury shares, excluding those reserved for employee compensation, or about 14.69 million shares out of roughly 17.98 million. Based on the previous day's closing prices (329,000 won for common shares and 237,500 won for preferred shares), the value of the treasury shares to be canceled amounts to about 4.8343 trillion won.
The shares to be canceled include not only treasury shares purchased to enhance shareholder value, but also those acquired for specific purposes during past efforts to improve the holding company’s governance structure. In 2015, SK Inc. merged with SK C&C (now SK Inc. AX) to simplify its governance structure and increase transparency.
A representative of SK Inc. explained, "After multiple in-depth discussions, the board concluded that canceling all treasury shares is the best way to serve the interests of all shareholders and enhance corporate value." The representative added, "With the amendment to the Commercial Act of the Republic of Korea allowing the board to resolve the cancellation of treasury shares acquired for specific purposes, we actively reflected the spirit of the amendment, which is to enhance shareholder value."
The decision to cancel all treasury shares also reflects the company’s significantly strengthened financial health, achieved through active portfolio rebalancing (business restructuring) over the past two years. On a separate financial statement basis, SK Inc.’s net debt fell from about 10.5 trillion won at the end of 2022 to 8.4 trillion won in the third quarter of last year, bringing it down to a single-digit trillion figure. Over the same period, its debt-to-equity ratio improved from 86.3% to 77.4%.
Separately, last month SK Inc. set its final dividend for the 2025 fiscal year (record date April 1) at 6,500 won per share. Including the interim dividend of 1,500 won paid in August last year, the total annual dividend comes to 8,000 won per share, up 14% from the previous year.
If SK Inc. is classified as a high-dividend company, its shareholders can benefit from separate taxation on their dividend income. A company is categorized as high-dividend if its cash dividend does not decrease from the previous year and either its payout ratio is at least 40%, or its payout ratio is at least 25% and the dividend increases by 10% or more year-on-year. In its disclosure, SK Inc. noted that the decision took into account factors such as the "special tax treatment for dividend income from shares of high-dividend companies."
The SK Inc. representative stated, "The decision to cancel all treasury shares worth 4.8 trillion won reflects the board’s firm commitment to maintaining transparent, shareholder-friendly management and to setting a model precedent in the domestic capital market." The representative continued, "To enhance corporate value, we will further strengthen shareholder trust and consistently uphold a management stance that puts shareholders first."
Meanwhile, SK Inc. will hold its 35th annual general meeting of shareholders on the 26th, where it plans to submit agenda items including approval of the financial statements and the election of directors.

soup@fnnews.com Lim Su-bin Reporter