This article was displayed on the ChosunBiz MoneyMove (MM) site at 3:48 p.m. on Sep. 12, 2025.
SK On, which acquired Daekyung O&T together with private equity fund (PEF) managers, wants to sell its equity stake, but it is expected to face obstacles. To sell the equity, it must obtain the consent of PEF managers Eugene Private Equity (PE) and Korea Development Bank Private Equity (PE), but they have expressed skepticism about SK On's equity sale.
According to the investment banking (IB) industry on the 12th, SK Group is seeking a buyer through Deloitte Anjin to sell the 40% equity stake in Daekyung O&T it holds through SK On. However, it is reported that Eugene PE and Korea Development Bank PE, the largest shareholders of Daekyung O&T, have no intention of selling their 60% stake. If the PEs do not agree, SK On cannot sell its equity.
They set up a special purpose company (SPC) in 2023 and acquired Daekyung O&T from PEF manager STIC Investments for about 400 billion won. SK Trading International (SK TI) bought 40% of the SPC equity, and Korea Development Bank PE and Eugene PE purchased the remaining 60%. Last year, SK TI merged into SK On, making SK On the holder of the SPC equity.
SK holds a call option to acquire the equity from Eugene PE and Korea Development Bank PE in the future. Although it was a strategic investor (SI), it also had in mind the possibility of acquiring management control of Daekyung O&T. In return, Eugene PE and Korea Development Bank PE made SK agree to obtain their consent when SK sought to sell their equity. The largest shareholders have expressed opposition to SK's equity sale.
SK has recently reorganized the group around companies in advanced industries such as semiconductors and batteries as its financial soundness deteriorated, and it is divesting some subsidiaries. By contrast, Eugene PE and Korea Development Bank PE are not in a rush to sell. If major strategic investor SK sells and exits its stake, there is concern it could negatively affect Daekyung O&T's corporate value.
An IB industry official said, "Although Eugene PE and Korea Development Bank PE indicated they have no intention of selling their stakes, Deloitte Anjin's teaser letter contained a note about selling 100% of the equity," and added, "It appears to be a move to increase the likelihood of a sale, but I understand all teaser letters have been recalled."
Founded in 1995, Daekyung O&T refined animal fats and waste cooking oil from animal slaughtering processes into oil and sold it as feedstock for biodiesel. The feedstock supplied by Daekyung O&T emits less carbon than fossil fuels and is used to produce environmentally friendly automobile and ship fuels and sustainable aviation fuel (SAF).
Growth has slowed as a second Trump administration, which is passive about expanding renewable energy, took office and European countries also slowed the pace of their energy transition plans. Daekyung O&T, which recorded sales of 584.5 billion won and operating profit of 40.2 billion won in 2023, saw both sales and profit decline last year to 502.7 billion won in sales and 30.5 billion won in operating profit.