SK Innovation considers IPO or sale of SK Lubricants

SK Innovation Co. Ltd., in a regulatory filing, said it is considering an initial public offering (IPO) or the sale of wholly owned SK Lubricants Co. Ltd.

An SK Innovation spokesman said last week that private equity firm MBK Partners was a potential buyer and that a stake sale was among several options the company was considering for SK Lubricants, Reuters reported.

The deal to buyout SK Lubricants  –  which has been preparing for a major initial public offering by the end of this year  –  is estimated to be worth KRW 3 trillion (USD 2.7 billion), according to local news reports.

“As of now, nothing has been conclusively settled. MBK’s offer is just one of the several options that SK Innovation is considering, including the possibility of an IPO, which we are still looking into,” said an SK Innovation spokesperson.

MBK Partners has offered to buy a majority stake in SK Lubricants, asserting that it “will acquire SK Lubricants under better conditions than those offered by an IPO,” according to industry sources.

If a deal is struck, SK Innovation would hand over a 75% controlling stake to the private equity fund and will get the right of first refusal, should the fund decide to sell SK Lubricants or pursue an IPO in the future, according to industry sources.

SK Innovation CEO Chung Chul-khil said last month that the company will sell off non-essential assets to deploy funds into its core business operations, as it seeks to weather the current poor profitability in the oil industry.