SK Telesys merges with SK Solmics, both wholly owned subsidiaries of SKC
Ik-Hwan Kim
Nov 08, 2022 (Gmt+09:00)
Robots inside the Cheonan plant of SKC Solmics
SK Solmics Co., a wholly owned subsidiary of SKC Inc., is poised to merge with SK Telesys Co. on February 1 of next year, according to regulatory filings to the Financial Supervisory Service on Tuesday.
SK Telesys is also wholly owned by SKC.
The parent company announced, “the goal of the merger is to streamline the source of semiconductor parts and equipment manufacturing to increase productivity.”
Industry insiders say, however, that the move is more about setting the groundwork to dispose of an underperforming subsidiary.
SKC is a chemical manufacturing arm of the SK Group and SK Telesys, one of its subsidiaries, works in the mobile device manufacturing sector.
Hit by the lack of demand for its products, SK Telesys has suffered a deficit since 2010 and has received hefty financial support from the parent group.
SK Telesys logo
In January, the Seoul Central District Court sentenced Choi Shin-won, former CEO and chairman of SK Networks Co., to more than two years in prison on embezzlement and other charges.
He was indicted in May 2021 for the alleged embezzlement in 2015 when serving as the chairman of SK Telesys Co.
In the same month, the Seoul Central District Prosecutors Office also indicted the chairman of the SK Supex Council Cho Dae-sik regarding the embezzlement. The council is the SK Group’s top decision-making body.
Even after SK Telesys dropped the mobile phone business and focused its efforts on the semiconductor sector, its financial structure continued to deteriorate.
As of last September, its debt-to-equity ratio stands at a whopping 916%, and its volume of deficit at 102.9 billion won ($74.7 million).