SKC sells SK bioland to secure funds for BM innovation Phase-2

• Selling its equity 27.94% securing 120.5 billion won to continue Deep Change

• Pushing forward with BM innovation Phase-2, concentrating on mobility semiconductors serving as its future growth engines

SKC (President, Lee Wan-jae,) is selling its entire equity in SK bioland to Hyundai HCN. The Company will use the funds, secured through the selloff, for the promotion of Business Model BM Innovation Phase-2, concentrating on mobility semiconductors serving as its future growth engines.

At a session of the Board of Directors, held on August 18, SKC decided to sell its equity 27.94%, (about 4.19 million shares) in SK bioland, to Hyundai HCN and it signed an agreement on stock transactions. The total transaction amount comes to 120.5 billion won, (28,750 won per share /EV EBITDA, _ base_d on results in 2019: 21.5 times) and the relevant procedures will be completed by mid-October.

SKC made the decision, despite the fact that SK bioland ranks No. 1 among domestic natural cosmetic raw materials, in consideration of its connectivity with the direction of BM Innovation associated with SKC Deep Change, and its role as a future growth engine.

SKC has secured funds to be invested in its Deep Change, by disposing of sectors whose synergistic effects are not high in association with BM Innovation. In the first half of the year, it established SK picglobal, a joint venture with PIC, as a state-run chemical business of Kuwait, and secured funds amounting to more than 1 trillion won by selling off SKC kolon PI, a PI film manufacturer.

SK bioland being sold off, is expected to enhance Hyundai Department Group’s online/offline distribution capability, and to provide considerable business-related synergy to it. As a manufacturer of cosmetics, health food, raw materials medical devices, and pharmaceutical raw materials, it has steadily posted 16-17% in an operating profit ratio for years. In 2019, it posted 106.3 billion won in sales and 14.5 billion won in operating profits, amid an unfavorable external environment.

Commenting on the matter, an SKC official said, “We, at SKC, have pushed forward with Deep Change, with the determination to be reborn as quite a different company, overcoming a lot of difficulties. Using the funds secured through this selloff, we will push BM Innovation Phase-2, focusing on future growth engines, like mobility and semiconductors, in earnest.”