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Press Release
After buying back SK Telecom’s own shares from KT, 5% (998.5 billion Korean won) of the purchased share will be destroyed. This is the biggest volume ever in Korea.
SK Telecom plans to utilize a 30% of surplus cash flow to buy back own shares and make cash dividends.
Agreed to small-scale merger with SK IMT (The merger date is the 1st of April).
SK Telecom held a board of directors meeting on the 20th of December and agreed to apply to the Financial Supervisory Commission for permission to buy back all SK Telecom shares owned by KT in large transaction amounts during off stock exchange hours. When the company gets its approval from the Financial Supervisory Commission, SK Telecom plans to destroy its own share with a purchase back value of one trillion won.
The approval of share transactions that is being asked for from the Financial Supervisory Commission are 29,808,333 shares (9.64%) of KT shares owned by SK Telecom and a total number of 8,266,923 (9.27%) of SK Telecom shares owned by KT. The price of each share according to the agreement is 50,900 won for KT share and 224,000 won for SK Telecom share. The total transaction amounts are 1.5172 trillion won for KT share and 1.8518 trillion for SK Telecom share.
SK Telecom announced its plan to destroy 5.0% (4,457,635 shares) of the buy-back shares, and the rest of the share 4.27% (3,809,288 shares) will be used for the purpose of maintaining a stable stock price in the stock market by exchanging stocks when a strategic affiliation or M&A occur in the future.
SK Telecom’s 5.0% destroyable share amounts to 998.5 billion won calculated by a purchase price of 224,000 won per share from KT. It will be the largest amount ever destroyed in Korea. It is also an even larger amount than the 827.3 billion won in total listed stocks destroyed by 18 major companies (including Samsung Securities and Posco) during the whole year of 2002.
In order to purchase back large amount of its own share during off hours, the company first files an application for buying back its own shares which has to be approved by the Financial Supervisory Commission for following its regulations on public noticing and issuing securities before the actual transaction, which was revised on December 13th. It must also follow the transaction rules of the Stock Exchange.
With the strong resolve of company management to increase values for shareholders, SK Telecom decided to increase the dividend distribution ratio (dividends/net income) by 10% over the past ratio (5%) for the shareholders in addition to destroying 5% of its own share.
With an effort to implement the company policy of increasing values for shareholders, SK Telecom also decided to buy back its own share and give cash dividends at the level of 30% of Surplus Cash Flow (FCF). This is 2.5 times higher than the three year (1999~2001) equivalent average 12% by NTT DoCoMo which is one of the best communication companies in the world.
In addition, at the board of directors meeting, the company decided to merge SK IMT under the procedures for small amalgamation to maximize the operating efficiency and synergy effects.
The merger ratio is that for every SKIMT share (face value, 5,000 won), 0.11276 shares (face value, 500 won) of SK Telecom will be allocated. The merger date is April 1st.
However, 36,800,000(61.34%) shares of SK IMT, owned by SK Telecom, will not be allocated for the merger.
The approval of share transactions that is being asked for from the Financial Supervisory Commission are 29,808,333 shares (9.64%) of KT shares owned by SK Telecom and a total number of 8,266,923 (9.27%) of SK Telecom shares owned by KT. The price of each share according to the agreement is 50,900 won for KT share and 224,000 won for SK Telecom share. The total transaction amounts are 1.5172 trillion won for KT share and 1.8518 trillion for SK Telecom share.
SK Telecom announced its plan to destroy 5.0% (4,457,635 shares) of the buy-back shares, and the rest of the share 4.27% (3,809,288 shares) will be used for the purpose of maintaining a stable stock price in the stock market by exchanging stocks when a strategic affiliation or M&A occur in the future.
SK Telecom’s 5.0% destroyable share amounts to 998.5 billion won calculated by a purchase price of 224,000 won per share from KT. It will be the largest amount ever destroyed in Korea. It is also an even larger amount than the 827.3 billion won in total listed stocks destroyed by 18 major companies (including Samsung Securities and Posco) during the whole year of 2002.
In order to purchase back large amount of its own share during off hours, the company first files an application for buying back its own shares which has to be approved by the Financial Supervisory Commission for following its regulations on public noticing and issuing securities before the actual transaction, which was revised on December 13th. It must also follow the transaction rules of the Stock Exchange.
With the strong resolve of company management to increase values for shareholders, SK Telecom decided to increase the dividend distribution ratio (dividends/net income) by 10% over the past ratio (5%) for the shareholders in addition to destroying 5% of its own share.
With an effort to implement the company policy of increasing values for shareholders, SK Telecom also decided to buy back its own share and give cash dividends at the level of 30% of Surplus Cash Flow (FCF). This is 2.5 times higher than the three year (1999~2001) equivalent average 12% by NTT DoCoMo which is one of the best communication companies in the world.
In addition, at the board of directors meeting, the company decided to merge SK IMT under the procedures for small amalgamation to maximize the operating efficiency and synergy effects.
The merger ratio is that for every SKIMT share (face value, 5,000 won), 0.11276 shares (face value, 500 won) of SK Telecom will be allocated. The merger date is April 1st.
However, 36,800,000(61.34%) shares of SK IMT, owned by SK Telecom, will not be allocated for the merger.