SK Telecom, 480 Billion KRW Shareholder Return to Appease Shareholders

Repurchased 300 Billion Shares and Cancelled 200 Billion
Quarterly Dividend of 180 Billion Implemented

President Yoo Young-sang speaking at the March shareholders' meeting [Photo by Yonhap News]

As promised, SK Telecom has announced shareholder return measures including share buybacks and dividends. The plan involves repurchasing treasury shares worth a total of 300 billion KRW, canceling 200 billion KRW worth of those shares, and conducting quarterly dividends amounting to approximately 180 billion KRW.

On the 27th, SK Telecom revealed that it signed a trust contract with SK Securities, a former affiliate securities firm, for a 300 billion KRW treasury share buyback. SK Securities, as trustee, will purchase SK Telecom shares up to the trust contract amount by January next year.

SK Telecom plans to cancel about 200 billion KRW worth of shares purchased through the trust. The canceled shares amount to 4,291,845 common shares, with the cancellation price per share set at 46,600 KRW based on the closing price at the end of June.

Additionally, SK Telecom will conduct a quarterly dividend of 830 KRW per share, totaling 181.3 billion KRW. The dividend yield based on market price is 1.7%. Combining the share buyback and dividends, the total shareholder return measures amount to approximately 480 billion KRW.

It is reported that SK Telecom plans to use the 183.2 billion KRW dividend income received from its subsidiary SK Broadband and its equity investment in Hana Financial Group as the source for these dividends. This means most of the dividends received from subsidiaries and investee companies will be redistributed to shareholders.

The response from the securities industry is positive. KB Securities analyst Kim Junseop stated, "SK Telecom's stock price declined due to uncertainties regarding government regulations on wireless service businesses, but businesses such as data centers (IDC) and cloud are structurally growing," adding, "Diversification of growth engines along with strengthened shareholder returns will have a positive effect on the stock price."

Hana Securities analyst Kim Hongsik commented, "SK, the major shareholder of SK Telecom, holds a fixed 30% stake, and the foreign ownership ratio has dropped to an all-time low of 42%," noting, "With no clear selling pressure, shareholder return measures are likely to be a driving force for a stock price rebound."

This content was produced with the assistance of AI translation services.