SK Innovation(096770) is plunging 14% on the 26th on news that it will absorb and merge its subsidiary SKIET.
As of 9:18 a.m. that day, SK Innovation was trading on the Korea Exchange at 106,900 won, down 18,100 won (14.48%) from the previous session.
The previous day, SK Innovation disclosed that it would merge SKIET through absorption. SK Innovation will issue new merger shares and deliver them to SKIET shareholders. For each SKIET common share, 0.11 share of SK Innovation common stock will be allotted.
Through the merger, the separator business operated by SKIET will be incorporated into SK Innovation. The company said the merger is a measure to secure financial stability and preemptively ease business and financial risks.
Launched in Apr. 2019 through a physical split of SK Innovation's materials business, SKIET produces lithium-ion battery separators (LiBS), a core material for electric-vehicle lithium-ion batteries. It had solidified its global position in secondary battery separators, but it is facing challenges in generating revenue due to the recent slowdown in the global electric-vehicle market.