This article was displayed on the ChosunBiz MoneyMove (MM) site at 10:03 a.m. on Jun. 24, 2026.
SK Group's electric-vehicle charger affiliate SK Signet carried out a third-party allotment paid-in capital increase of about 70 billion won to its parent SK Co. The eye-catching part is the funding method. It chose "cumulative, participating preferred shares with voting rights," not common shares.
The industry reads this investment structure as a measure to prevent dilution of existing common shareholders' equity value. At the same time, SK Co. kept its voting rights, secured the right to receive unpaid preferred dividends cumulatively in the future, and to additionally participate in common-share dividends. While minimizing dilution of existing shareholders' common equity, the parent is set to secure both control and stability of dividend revenue.
According to the investment banking (IB) industry and the Financial Supervisory Service's electronic disclosure system on the 24th, on the 19th SK Signet decided to issue 9.81 million new preferred shares and allocate them to its parent SK Co. via a third-party allotment capital increase. The amount is about 70 billion won in total. The capital increase will be finalized by SK Co.'s board on the 24th.
In December last year, SK Signet issued common shares and allocated them to SK Co. This time, unlike last year, it chose preferred shares, and the industry says there was good reason. SK Signet's share price is excessively low compared with its peak.
On the previous day on the Konex market, SK Signet common shares finished trading at 6,940 won. That is 44% lower than this year's Feb. peak (12,310 won) and is less than half of the all-time high (30,900 won).
The new issue price was set at 7,135 won without applying a discount to the reference price reflecting market transaction value before the board resolution. If 70 billion won worth of common shares had been issued at this unit price, about 9.81 million new shares would have been listed. That amount is close to 45% of the total number of shares outstanding before the capital increase (about 21.67 million shares).
If the number of floating shares jumps to 1.5 times the existing level, the stock price is bound to face downward pressure due to concerns about earnings per share (EPS) dilution and an overhang of potential selling. Although SK Co. has no plan at all to dispose of shares on the market, it still poses a potential risk. Therefore, SK Co. decided to issue "unlisted preferred shares" that are not listed on the Konex market to prevent a stock-price shock. For ordinary shareholders, there will be a "supply-and-demand illusion" effect in which dilution appears to be defended for the time being because the number of shares does not immediately increase.
Looking at the terms of these preferred shares, the structure does not disadvantage the parent SK Co. Typically, preferred shares are favorable for dividends but lack voting rights, yet the new shares carry one voting right per share as is. This means SK Group's control over SK Signet remains intact.
The shares also carry the "cumulative, participating" preferred condition. Even if dividends cannot be paid immediately due to research and development (R&D) and facility investment, unpaid preferred dividends do not disappear and are carried forward to the next year. When dividends resume, the accumulated unpaid portion is paid first, and after receiving preferred dividends, they can also participate in additional dividends alongside common shares depending on the issuance terms.
In addition, these preferred shares are granted the right to participate in the distribution of residual assets upon liquidation of the company on the same basis as common shares. If assets remain after creditors are repaid, SK Co. can share the residual assets alongside common shareholders.
An SK Co. official also said, "Preferred shares can be structured more flexibly than common shares in terms of issuance conditions, allowing use tailored to future funding situations." This is interpreted to mean that when attracting outside financial investors (FI) in the future, preferred shares can be used instead of common shares to set dividend rates, voting rights, and redemption terms differently to meet investor demands. It is a structure that can stably attract new investment while reducing the impact on the rights of existing common shareholders.
At the same time, on the day it decided on the capital increase, SK Signet convened an extraordinary shareholders meeting and deleted the articles-of-association clause that forced conversion of preferred shares into common shares. This prevents preferred shares from automatically converting into common shares after 10 years and shaking the existing common equity structure, and lays the groundwork for using them as an independent funding tool separate from common shares.