SK mulls sale of specialty gas subsidiary for reported $3 billion in restructuring move

SK is reviewing divesting its equity in its specialty gas manufacturing subsidiary as part of the group’s broader efforts to restructure and enhance financial and managerial stability.

SK's offices in Jung District, central Seoul [NEWS1]

SK is reviewing divesting its equity in its specialty gas manufacturing subsidiary as part of the group’s broader efforts to restructure and enhance financial and managerial stability.

“We are currently reviewing various strategic options, including the sale of our stake in SK Specialty, but nothing has been specifically decided yet,” SK said through an electronic disclosure on Tuesday in response to reports that it is seeking to sell its gas unit for 4 trillion won ($3 billion) to private equity funds.

It added that a decision will be reached and announced within a month.

SK Specialty manufactures specialty gases used in semiconductor and display panel production. The company commands 40 percent of the global market share for nitrogen trifluoride (NF3), a key gas used in wafer residue cleaning during chip production, according to the company.

It is also a leading global producer of tungsten hexafluoride (WF6), crucial for integrated circuit manufacturing and monosilane (SiH4), which is used in the production of silicon-based anodes for EV batteries.

Global demands for specialty gases are rising as chip manufacturers transition to using 200-millimeter to 300-millimeter wafers, which require more than twice amount of gas to clean. The company is an attractive offering for those who want to enter the market due to high entry barriers, as specialty gases need to receive statutory licensing for sales and production facilities.

As the sell-off is estimated to be valued at trillions of won, media reports speculated that SK might also divest its partial stake in the company to share the management rights.

SK Specialty was folded into SK after the latter took over the management rights from OCI Group, a chemical and solar power company, in 2015.

SK Group Chairman Chey Tae-won called for management restructuring at a meeting attended by SK’s major affiliates in June to streamline overlapping investments and reduce the number of subsidiaries to “a manageable range.”

True to his word, the company has been pushing forward with multiple mergers of its profitable businesses and scaling down nonprofitable ones this year.

The holding company's board approved a merger between SK’s two major units, SK Innovation and SK E&S, last month. The merged entity will be formed on Nov. 1.

In addition, SK’s Essencore, a semiconductor module reprocessing company, and SK Materials Airplus, a manufacturer of industrial medical gases for semiconductors, will become subsidiaries of SK ecoplant, a construction and recycling firm.

SK Networks also sold its car rental company, SK Rent-a-Car, to Hong Kong-based Affinity Equity Partners for 820 billion won. SK Earthon, SK Innovation’s petroleum exploration subsidiary, sold off 20 percent stake in Peru LNG to U.S.-based MidOcean Energy for 340 billion won.

SK Square, an investment arm of SK Group, also offloaded its stake in game publisher Krafton via a block deal for about 260 billion won.

BY LEE JAE-LIM [lee.jaelim@joongang.co.kr]