Hahn & Co. Rules Out SK D&D Delisting for at Least One Year... On-Exchange Purchases and Treasury Share Cancellation Also Excluded

Submission of Revised Filing for 136.7 Billion Won Rights Offering
"No Plans to Pursue Delisting for At Least One Year"
On-Market Purchase and Treasury Share Cancellation Also Blocked

Private Equity Fund (PEF) manager Hahn & Company (Hahn & Co.) announced that it will not pursue a voluntary delisting of SK D&D for at least the next year. The firm also pledged not to increase its stake through on-exchange purchases or any other methods. With controversy mounting over the “attempted voluntary delisting” in the context of a rights offering, attention is now focused on whether this move will quell concerns from minority shareholders.

According to the investment banking (IB) industry on August 11, SK D&D submitted a revised securities registration statement concerning the rights offering to the Financial Supervisory Service the previous day. The document states, “Hahn & Co. has confirmed to the company that it has no intention of pursuing delisting through additional tender offers or other means for at least one year from the date of submission of this revised securities registration statement.”

SK D&D initially filed its securities registration statement for the rights offering on July 28. The plan is to issue 44,681,000 new shares to raise 136.7 billion won, of which 62 billion won will be used to repay privately placed bonds maturing in October, and approximately 74.7 billion won will be allocated to fulfill joint guarantees on mid-term loans for buyers of the Gunpo Triarts Knowledge Industry Center.

The company maintains that the capital increase is an unavoidable measure to prevent a default. While implementing self-help measures such as project financing loans, stock-secured loans, and asset sales in parallel, SK D&D explained that without the rights offering, its cash balance would turn negative by October.

'From "For the Time Being" to "At Least One Year"'

In its initial filing, Hahn & Co. stated simply that it would not seek a delisting via tender offer “for the time being.” Because no specific period was indicated, there were concerns that the company’s position could change after the capital increase was completed. The revised filing has now made the period explicit: at least one year.

The company has also ruled out other avenues. SK D&D stated, “Hahn & Co. has confirmed it does not intend to artificially increase its shareholding through on-market trading or additional block deals.”

SK D&D has also made commitments regarding its own actions: “There is no plan to acquire or cancel treasury shares that would reduce the percentage of shares held by general shareholders.” Canceling treasury shares would decrease the total number of outstanding shares, thus increasing the major shareholder’s ownership percentage even without additional purchases, but this possibility has now been closed off as well.

In summary, SK D&D has blocked all three routes by which its ownership percentage could increase: tender offer, on-exchange transactions, and reduction in the number of outstanding shares.

Regulatory Correction Demanded in Response to Minority Shareholder Petition

This correction was prompted by concerns raised by minority shareholders.

Shareholders pointed out that in the process of the rights offering, if forfeited shares arise, the shareholding ratio of Hahn & Co. could actually increase. Given the precedent of Hahn & Co. having pursued a voluntary delisting in the past, suspicions were raised that the current offering could also be intended to expand its ownership stake.

Organized around the minority shareholder platform ACT, shareholders submitted a petition to the Financial Supervisory Service on August 5, voicing “reasonable suspicion regarding Hahn & Co.’s renewed attempt at delisting.” The Financial Supervisory Service on that same day demanded a revision to SK D&D’s securities registration statement.

Some also argued that the decision not to publicly offer the forfeited shares, but to classify them as unissued shares, indicated an intention to boost the stake. In response, SK D&D disclosed in its statement that, regardless of the subscription rate among existing shareholders, the percentage held by minority shareholders would be higher under the “unissued shares” approach than under a public offering. A public offering would further increase the number of outstanding shares, with the new shares going to outside investors, resulting in greater dilution of current shareholders.

An investment banking (IB) industry source said, “It appears that Hahn & Co. is making efforts to dispel market misunderstandings in order to restore SK D&D’s stability as quickly as possible.”

This content was produced with the assistance of AI translation services.