SK Group Chairman Choi Tae-won faces a court-ordered payment of 944 billion won in cash following a divorce settlement ruling on May 24, while SK stocks declined 18.32% over three consecutive trading days through May 28. The ruling requires payment to Noh So-young, director of Art Center Nabi, with a 5% annual interest penalty if delayed after the judgment becomes final on August 7. The stock price drop reduced the value of Chairman Choi's 12,975,472 SK shares from approximately 8.4989 trillion won on May 23 to about 6.9419 trillion won on May 28, a decrease of approximately 1.557 trillion won. The decline complicates fundraising calculations for the cash payment, as collateralized loan ratios and potential share sales face increased pressure. Chairman Choi's collateralized loan ratio against his SK shares rose from 33.4% in late June to an estimated 53.5% based on the May 28 closing price.
Court Orders 944 Billion Won Cash Payment as SK Stocks Fall 18.32%
The court ruled on May 24 that Chairman Choi must pay 944 billion won in cash as an asset division settlement. If payment is delayed after the judgment becomes final, a 5% annual interest penalty applies, amounting to approximately 129.3 million won per day or about 47.2 billion won per year. The judgment becomes final on August 7 unless either party files a re-appeal. If a re-appeal is filed, the payment deadline extends until the Supreme Court issues a final ruling.
SK stocks fell for three consecutive trading days starting May 24. The stock price dropped from 655,000 won on May 23 to 630,000 won on May 24 (down 3.82%), then to 623,000 won on May 27 (down 1.11%), and finally to 535,000 won on May 28 (down 14.13%). The cumulative decline from May 23 through May 28 reached 18.32%. Chairman Choi's shareholding value decreased from approximately 8.4989 trillion won on May 23 to about 6.9419 trillion won on May 28, a reduction of approximately 1.557 trillion won. Compared to the May 24 closing price, the shareholding value declined by approximately 1.2327 trillion won.
Collateralized Loan Ratio Rises from 33.4% to 53.5% Following Stock Decline
As of June 25, Chairman Choi's collateralized stock loan stood at 436.5 billion won, down 10.8% from 489.5 billion one year earlier, according to the Financial Supervisory Service's electronic disclosure system and Leaders Index corporate analysis institute. The number of shares pledged as collateral decreased 62.5% from 4,070,865 shares to 1,524,892 shares. Despite the reduction in pledged shares, the collateral valuation increased 63.4% from 800.7 billion won to 1.3084 trillion won due to SK stock price appreciation. The loan-to-collateral ratio fell from 61.1% to 33.4%, a decrease of 27.8 percentage points.
Applying the May 28 closing price of 535,000 won to the 1,524,892 pledged shares yields a collateral valuation of approximately 815.8 billion won. Assuming the loan balance remains at 436.5 billion won, the loan-to-collateral ratio rises to approximately 53.5%. The collateral value decreased by about 492.6 billion won from the late-June figure exceeding 1.3 trillion won. On May 28 alone, the estimated collateral value declined by approximately 134.2 billion won.
Chairman Faces Multiple Fundraising Options Including Share Sales and Dividends
Market observers monitor whether Chairman Choi will utilize additional collateralized stock loans given the increased collateral burden. If the full 944 billion won asset division payment is added to the existing 436.5 billion won loan, total borrowing would reach 1.3805 trillion won on a simple sum basis. Financial institutions apply collateral recognition ratios below market value to account for price volatility. Concentration limits for single-stock and single-borrower exposures also factor into lender capacity.
Based on the May 28 closing price, selling 1% of SK shares (724,900 shares) would generate approximately 387.8 billion won. Raising the full 944 billion won through share sales would require selling approximately 1.76 million shares in a simple calculation, representing about 13.6% of Chairman Choi's holdings and about 2.4% of SK's total issued shares. Block deal discounts and taxes would increase the number of shares requiring disposal. Dividend income alone provides insufficient coverage—Chairman Choi received approximately 103.8 billion won in pre-tax dividends from SK last year, plus 8.25 billion won in compensation from SK and SK Hynix.
FAQ
Q: What payment did the court order SK Chairman Choi Tae-won to make on May 24?
A: The court ruled on May 24 that Chairman Choi must pay 944 billion won in cash as an asset division settlement to Noh So-young, director of Art Center Nabi. The judgment becomes final on August 7 unless either party files a re-appeal. If payment is delayed after finalization, a 5% annual interest penalty applies.
Q: How much did SK stocks decline following the court ruling?
A: SK stocks fell 18.32% over three consecutive trading days from May 23 through May 28. The stock price dropped from 655,000 won on May 23 to 535,000 won on May 28. Chairman Choi's shareholding value decreased from approximately 8.4989 trillion won to about 6.9419 trillion won during this period, a reduction of approximately 1.557 trillion won.
Q: How did the stock decline affect Chairman Choi's collateralized loan ratio?
A: Chairman Choi's collateralized loan ratio rose from 33.4% in late June to an estimated 53.5% based on the May 28 closing price. The collateral value of his 1,524,892 pledged SK shares decreased from over 1.3 trillion won to approximately 815.8 billion won, reducing the borrowing capacity cushion established during the earlier stock price appreciation.
