This article was published on July 28, 2025, at 10:59 a.m. on the ChosunBiz MoneyMove site.
SK Innovation will hold a board meeting on the 30th to decide on a 2 trillion won investment attraction plan related to its subsidiary SK On's stock price return swap (PRS). It has already selected MERITZ Securities as the preferred negotiation party, but the board still needs to approve it afterwards and finalize the investment conditions.
MERITZ Securities has quickly started the sell-down (re-sale) process and is looking for institutions to acquire the shares. Industry insiders believe that the participation of the MG Saemaul Geumgo will be a variable that determines the success of this investment. If the Saemaul Geumgo decides to invest, it could pave the way for the participation of other institutions that have been waiting. Conversely, if the Saemaul Geumgo's investment falls through, the PRS by MERITZ may revert to square one.
According to investment banking (IB) industry sources on the 28th, SK Innovation decided to present an agenda for a 2 trillion won PRS investment from MERITZ Securities at its board meeting on the 30th.
Previously, on the 16th, SK Innovation selected MERITZ Securities as the preferred negotiator for a 5 trillion won liquefied natural gas (LNG) liquefaction deal. The board meeting is scheduled for the 30th, so a preliminary report needed to be made about two weeks in advance, which is why it was reported that they hastily selected and notified the negotiator on the 16th.
MERITZ Securities proposed to acquire 3 trillion won worth of convertible preferred shares (CPS) at an interest rate in the upper 6% range and to directly support the remaining 2 trillion won to SK On through the PRS method. The PRS interest rate is 5.3% per year. This aggressive move was reported to be due to SK's urgent need for investment.
MERITZ Securities has started with a PRS sell-down of 1.4 trillion won. It is offering major banks among other institutions the opportunity to acquire shares at a priority interest rate of 4.5%. Initially, the priority interest rate was set at 4.3%, and the subordination interest rate for the 600 billion won to be acquired by MERITZ Securities was set at 7.6%, but to enhance investment appeal, the priority interest rate was slightly increased to 4.5%, while the MERITZ rate was lowered to 7.17%. This meets the internal yield threshold of 'above 7%'.
The amount MERITZ Securities is soliciting for the PRS sell-down is in the range of 200 billion to 300 billion won per institution. However, it is reported that very few places have made investment decisions so far.
A contact at a commercial bank said, "Even if we help MERITZ acquire the PRS amount this time, it is not a direct transaction with SK Group," adding that, "There is a possibility that SK may later request to increase exposure in the form of direct investment, but most banks already have significant exposure to SK Group, making it difficult for them to readily participate."
In this situation, the participation of Saemaul Geumgo could be a significant turning point for MERITZ Securities. According to the IB industry, Saemaul Geumgo is reportedly considering a proposal from senior management to invest less than 500 billion won in the SK On PRS. If Saemaul Geumgo decides to invest, it would make it easier for MERITZ Securities to encourage the participation of other institutions.
Saemaul Geumgo is an institution connected to MERITZ Securities in various ways. Its subsidiary MG Capital (formerly M Capital) borrowed about 280 billion won from MERITZ Securities during a liquidity crisis last year. It is said that this loan was also decided through a top-down approach. In the case of Homeplus, Saemaul Geumgo made an equity investment, and MERITZ Securities provided acquisition financing refinancing. Both institutions actively engage in real estate deals, leading to many touchpoints.
If the participation of institutions, including Saemaul Geumgo, in the PRS investment is low, it is likely that MERITZ Financial Group will have to bear unsold amounts. It is reported that not only MERITZ Securities but also MERITZ Fire & Marine Insurance will step in to acquire them. In the case of MERITZ Capital, it is currently said to be in the stage of coordinating its participation.