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SK Holdings makes first return from investment

Dec 20,2017
SK Holdings, the holding company of SK Group, has started making money off its investments.

While most Korean holding companies live off brand rights fees and dividends from affiliates, SK Holdings plans to build up its own business by generating returns from investments.

SK Holdings said in a statement Tuesday that it made $10 million from Eureka Midstream, an American shale gas company. Compared to the over $100 million it gave to Eureka in October, the return is roughly 10 percent and was made in just two months.

“The $10 million represents dividends from the fourth quarter this year,” an SK spokesman said, “and we expect to reap quarterly dividend income next year as well.”

The income, according to SK, is the first fruit born from the company’s business model of building up an investment portfolio abroad. The outcome is expected to accelerate SK Holdings’ transition to a global investment firm, as proposed by CEO Jang Dong-hyun when he took office earlier this year.

SK had prepared the Eureka investment for over three years. The company was chosen because of growing demand for eco-friendly fuel and potential synergy with SK’s oil refining and petrochemical affiliates like SK Innovation and SK E&S.

For future investments, the holding company plans to target biopharmaceuticals and semiconductors.

This year alone, SK Holdings has invested 1.7 trillion won ($1.56 billion), over half of it in foreign companies like E-Shang Redwood Group, the second-largest logistics provider in China, and Turo, an American car-sharing company.

SK Holdings also started a joint venture in Malaysia with the Korean car-sharing company Socar in May.


BY KIM JEE-HEE [kim.jeehee@joongang.co.kr]