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Press Release
Euromoney has selected SK Telecom’s issuance of international exchange bonds worth USD 330 million, as the
SK Telecom issued the exchange bonds for shareholder return purposes. In the case of exchanging shares when foreign investors’ shares go beyond the 49% limit, SK Telecom will pay the share exchange applicants in cash.
SK Telecom is the first non-financial firm in Korea to receive the honor for
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SK Telecom officials and officials from financial institutions who participated in issuing SK Telecom`s exchange bond, are shown receiving the prize for `Best Asian Debt Deal of the Year` from Euromoney of England (from left to right, Joseph Galagar, head of CSFB`s Asia Corporate Finance Group, Dong Hyun Jang, vice-president and head of SK Telecom`s Management Planning Office, Hyung Jong Song, vice-president and head of SK Telecom`s IR Office, and Charls Alexsandar, head of Lehman Brothers` Asia Corporate Finance Group, are shown).
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SK Telecom officials and officials from financial institutions who participated in issuing SK Telecom`s exchange bond, are shown receiving the prize for `Best Asian Debt Deal of the Year` from Euromoney of England (from left to right, Joseph Galagar, head of CSFB`s Asia Corporate Finance Group, Dong Hyun Jang, vice-president and head of SK Telecom`s Management Planning Office, Hyung Jong Song, vice-president and head of SK Telecom`s IR Office, and Charls Alexsandar, head of Lehman Brothers` Asia Corporate Finance Group, are shown).
Corporate Finance, Euromoney’s sister magazine, revealed that on May 27, 2004, SK Telecom successfully issued international exchange bonds worth USD 330 million through the "Cash Settlement" method. This was a significant achievement in terms of practicing shareholder-focused management. It overcomes difficulties in following the 49% rule limit on the foreign investors’ equity ceiling. The magazine added that the "Cash Settlement" method has been applied by U.S. companies, but this is the first time it has been applied by an Asian company.
The issuance of the exchange bonds made it possible to keep SK Telecom’s promise to purchase about 2% of the company’s treasury stock from the stock market in the first half of 2004. This will be used for a shareholder return that will take place in the way of a special dividend. In spite of fact that the world’s stock market was in a slow-down, and international interest rates had gone up remarkably at that time, SK Telecom successfully issued the exchange bond at a 25% Premium and a 1.25% of yield to maturity. The company received purchase orders for an amount five times greater than the volume of issuance at these favorable terms.
To comply with exchanging shares when foreign investors’ shares would go beyond the 49% limit, SK Telecom will pay share exchange applicants in cash by selling its trusted treasury stock in place of directly delivering stock. To prevent any possible risk, the company has managed to establish safeguards in other financial institutions.
SK Telecom received this prize in recognition of a very unique and creative design for an exchange bond issuance structure, as well as for risk hedging in dealing with treasury stock. An SK Telecom official said "It is a first for a non-financial firm in Korea to have received the prize for "Best Asian Debt Deal of the Year" from Euromoney. This demonstrates that SK Telecom’s shareholder-focused management, and global financing capabilities, have reached the highest global level.
Euromoney is a British magazine that specializes in business entities’ financial matters. The main readers of this magazine are global companies, and financial and investment institutions. Euromoney ranks equally as a world authority with such magazines as The Financial Times, The Wall Street Journal, and The Institutional Investor.