SK’s trading arm shakes off debt

SK Networks Co., the trading arm of SK Group, graduated from a debt-restructuring program yesterday about eight months early, said its major creditor, Hana Bank.
Over 96 percent of its creditors, including the bank, agreed to end their joint supervision of the company in recognition of its faster-than-expected normalization process. SK Group Chairman Chey Tae-won’s decision last week to donate his 40.7 percent stake in the Walkerhill Hotel in Seoul to the company also contributed to the early graduation, according to creditors. The completion of the workout scheme had been projected for the end of the year.
SK Networks earned a record-high profit of 388 billion won ($418 million) last year, gradually boosting the amount from 192 billion won in 2003, when its bailout started.
The company, formerly SK Global, was placed on the verge of bankruptcy because of a liquidity crisis after being found to have been involved in a 1.5 trillion won accounting fraud in early 2003. In October that year, its creditors launched a workout plan. Over the past three years and six months, SK Networks laid off 30 percent of its original workforce, or 800 people, and gave up businesses that had lower profitability. At the same time the company has constantly developed cash cows, such as Internet phones, clothing lines and gas stations in China and southeast Asia.
Hana Bank and other creditors own a combined 55.8 percent stake in SK Networks and are scheduled to sell their stake in the company in a phased manner. But 15 percent of their stake in the company will be sold as the lock-up period ends in tandem with the end of the debt workout process.

By Seo Ji-eun Staff Writer [spring@joongang.co.kr]