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| SK's lubricant facility, a joint venture with Repsol of Spain, is seen in this file photo, Thursday. Courtesy of SK Lubricants |
By Kim Yoo-chul
Korea's SK Lubricants said Thursday that it plans an initial public offering (IPO) worth between 1.2 trillion won and 1.5 trillion won in May, the company said in a regulatory filing.
The company, entirely owned by SK Innovation, said it plans to sell 12.7 million shares of common stock as part of the IPO, the filing said.
In detail, the value of the shares was calculated based on the top price of a preliminary range of between 101,000 won and 122,000 won per share, it added.
The plan was approved by shareholders' meeting by SK Innovation and SK Lubricants, each, the companies said. SK Lubricants will also issue 2.55 million new shares in the IPO.
"The completion of the IPO is due mid-May," said SK Lubricants in a statement, adding the company plans to use the capital that will be sourced from the IPO to search for new businesses as the company is pursuing external corporate growth.
SK Innovation, which also expects to retain a 70 percent stake in SK Lubricants after the listing, is the owner of Korea's top refinery, SK Energy.
Its IPO plan comes after the company is continuing to solidify its position in the high-quality Group III lubricant business category. It has over a 39 percent global market share in the category selling its premium lubricant products to more than 50 countries.
The company statement said its annual manufacturing capacity had reached over 3.5 million tons thanks to joint operations with major overseas partners such as Repsol of Spain and JX Energy of Japan.
According to commodities researcher ICIS, the global Group III base oil market is expected to grow at 3.4 percent on average annually as global lubricant manufacturers are on track to switch from Group I base oil to premium and stable Group II and Group III base oils to ride on the increased appetites of governments preferences in using cleaner fuel.
The filing said SK Lubricants reported 504.9 billion won in operating profit throughout last year with its operating profit margin reaching an average of 13.5 percent over the last three years. Its cash- and cash-equivalent assets by last year were about 600 billion won.
"Given the continued growth and brighter market outlook, we are positive we will close the IPO as much as we hoped," said the statement.
Back in 2013 and 2015, SK Innovation had reviewed the IPO of SK Lubricants; however, the company delayed the plan because of the prolonged slump in the global oil industry.
