Property Division '1.38 Trillion Won'... How Much Stake Can Chey Tae-won Sell?

Choi Tae-won Ordered to Pay 35% of Assets to Noh So-young
Options Include Selling Shares or Secured Loans
SK Siltron Share Sale Expected

With the court ruling ordering SK Group Chairman Chey Tae-won to pay 1.38 trillion won in property division in the divorce lawsuit with Noh So-young, director of the Art Center Nabi, attention is focused on how Chairman Chey will raise these funds.

Chairman Chey Tae-won of SK and Director Noh So-young of Art Center Nabi attended the divorce lawsuit appeal trial held last month at the Seoul High Court in Seocho-gu, Seoul.
[Photo by Yonhap News]

The Family Division 2 of the Seoul High Court (Presiding Judges Kim Si-cheol, Kim Ok-gon, Lee Dong-hyun) ruled on the 30th in the appeal trial of the divorce lawsuit between Chairman Chey and Director Noh, ordering "the plaintiff (Chairman Chey) to pay the defendant (Director Noh) 2 billion won in alimony and 1.3808 trillion won in property division."

This amount is a significant increase from the first trial in December 2022, which recognized 100 million won in alimony and 66.5 billion won in property division, making the property division amount the largest known to date. The court estimated the total assets of the two at approximately 4.0115 trillion won and judged that Chairman Chey and Director Noh should divide the assets at 65% and 35%, respectively.

If this ruling is confirmed by the Supreme Court, Chairman Chey is expected to either sell his shares or take out secured loans.

Currently, Chairman Chey holds 17.73% (12,975,472 shares) of SK Inc. Based on the closing price on the 30th of 158,100 won per share, this stake is valued at 2.0514 trillion won. If he sells a significant portion of these shares to cover the property division, it could seriously affect the group’s management rights, so he will likely try to avoid selling as much as possible.

In addition, Chairman Chey holds common and preferred shares of SK Discovery, at 0.11% (21,816 shares) and preferred shares at 3.11% (42,200 shares), respectively. He also owns 3.21% (67,971 shares) of SK Chemicals. Since these affiliates have been effectively managed separately by his cousin, Chairman Chey Chang-won of the SK Supex Council, there is little burden from selling these shares.

However, the market value of SK Discovery (preferred) is only about 900 million won (1.3 billion won), and SK Chemicals is worth just 3.4 billion won. He also holds small amounts of SK Square (196 shares) and SK Telecom (303 shares).

There is a strong expectation that to raise a large amount of cash immediately, Chairman Chey will put up all of his 29.4% stake (about 19.7 million shares) in the unlisted SK Siltron for sale. In 2017, Chairman Chey participated in acquiring Siltron when SK purchased it from LG. At that time, the stake was valued at about 260 billion won, but it is now estimated to be more than three times that amount.

Since SK Inc. holds 51.0% of SK Siltron, Chairman Chey’s sale would not affect management rights. However, as these are unlisted shares, there are concerns that he may not receive full value if he sells, and capital gains tax will also be incurred from the sale.

A business insider said, "Even if he sells all his holdings except for the holding company SK Inc., it will be insufficient to cover the division amount," adding, "To protect the group’s management rights, he will try to minimize sales and instead seek secured loans against his shares."