Chey Tae-won to sell $700m of SK Inc shares to fund divorce settlement

Raising the cash

SK Group Chairman Chey Tae-won is selling a 2.3% stake in SK Inc., the conglomerate’s holding company, to raise 944 billion won (around $700 million) for his historic divorce settlement.

The transactions, scheduled to begin on 2 November, will see Chey unload more than 1.65 million shares, according to regulatory filings. The total value of the sale matches the exact amount a Seoul court ordered him to pay his ex-wife, Roh Soh-yeong, the director of Art Center Nabi.

While the case is still pending a final ruling from South Korea's Supreme Court, Chey is moving early to secure the cash. He recently narrowed the scope of his legal appeal, accepting 700 billion won of the lower court's award and leaving only the remaining 244 billion won to be contested. By initiating the sale now, Chey is preparing to clear the entire potential debt.

Structuring the sale

To protect his control of the country's second-largest conglomerate and avoid depressing the share price, Chey is dividing the block trade into two distinct parts.

About 544 billion won ($392 million) of the stock is being sold directly to an unnamed strategic investor. SK Inc. said this buyer stepped in after evaluating the company’s long-term business prospects and competitiveness.

The remaining 400 billion won ($288 million) of shares will be offloaded through a three-year price return swap (PRS) with financial institutions, including Korea Investment & Securities. This derivatives structure gives Chey immediate liquidity while allowing him to settle any gains or losses from future share price movements over the next three years.

Choosing a direct share sale marks a departure from what many in the market expected. Analysts had assumed Chey would take out loans against his holdings. However, selling down his stake directly shields him from high interest rates and the risk of being forced to provide more collateral if SK's stock price falls. It also leaves his 29.4% stake in SK Siltron untouched, preserving it as another potential source of cash if needed.

Impact on control

Once the transactions are complete, Chey’s personal holding in SK Inc. will drop from 17.8% to 15.5%. He will remain the holding company's largest shareholder.

The combined stake held by Chey and related parties is expected to fall to 22.9% from 25.2%, though some analysts calculating the total voting rights put the combined total at 30.5% after the sale.

SK Inc. sought to reassure investors that the change in ownership would not disrupt operations. The company said Chey will continue to focus on responsible management and that its existing growth plans, investments, and shareholder return programmes will proceed as normal.