Value context and insight. lkm@koreatimes.co.kr
1 in 5 workers at SK Biopharm to quit for windfall stock gains
SK Biopharmaceuticals CEO Cho Jeong-woo, second from right, poses for a photo at the listing of the firm on the Korea Exchange in Yeouido, Seoul, July 2. Korea Times file
By Lee Kyung-min
By Lee Kyung-min
About 40 workers at SK Biopharmaceuticals are leaving with over 1.6 billion won ($1.35 million) in short-term windfall gains after the newly listed firm's stock value quadrupled over the past month, according to industry sources Thursday.
They are part of the 207 employees at the bio subsidiary of SK Group, the second-largest conglomerate in Korea by market capitalization, who were given an average of 11,820 shares each as part of the employee stock ownership plan (ESOP). Some mid-level managerial figures received over 20,000 shares each.
The share price set for the initial public offering (IPO) July 2 was 49,000 won. But it has since jumped to 191,000 won, meaning their initial investment that averaged 579 million won will lead to a corresponding spike up to around 2 billion won.
The collective move has picked up speed after the shares showed signs of adjustment recently, making the workers anxious about a possible dent in their gains in a highly volatile equity market.
The workers are demanding that the firm more promptly process their request for termination of employment and severance pay, a procedure needed to cash out their stocks faster.
Stocks given via ESOP can be transferred to individual accounts from the Korea Securities Depository (KSD) only if workers quit the firm.
By law, the KSD is required to hold the ESOP-managed stocks for at least a year, but workers that quit can have the stocks transferred a month after termination.
The firm initially sought to give severance pay to the leaving workers within up to four weeks after their date of termination. But it retracted the decision and said the money will be paid in full within 14 days of termination, following protests from the leaving workers.
The stock price soared to as high as 269,500 won July 7, but has since plateaued, hovering around a range of 170,000 won and 200,000 won. It closed at 186,000 won, Thursday, down 5,000 won or 2.62 percent from the previous session.
Meanwhile, the listing of the bio company is an indication of the IPO market involving the high-in-demand sector further heating up in the latter half of 2020.
Around 20 firms are expected to seek the listing between August and December, adding to eight bio firms listed between January and July.
Korea Pharma, a drug maker established in 1974, was listed at a price of 9,000 won Aug. 10. The competition rate was 2,035 to 1 to subscribe the share of the firm that reported an annual sale of 66.1 billion won and a net profit of 5.5 billion won in 2019.
Celemics, a bio material and technology developer, will be listed Aug. 21. The share will be offered at a price of 20,000 won, following a 1,203-to-1 competition rate to subscribe to the share.