SK hynix (000660.KS) moved to defuse a controversy over a possible initial public offering by Solidigm, its U.S. subsidiary, saying any decision on a listing would put shareholder value first. The statement came as concerns mounted over what critics call duplicate listing, which they say could erode value for existing SK hynix shareholders.
"We are reviewing various options to strengthen Solidigm's competitiveness, but nothing has been finalized," the company said on the 1st. "Whatever option we consider, how it affects the economic value held by existing shareholders will be an important criterion in our judgment."
"In deciding whether to use outside capital, we must comprehensively weigh not only the economic impact of each option on the company and existing shareholders, but also the benefits of deploying that capital and the financial implications of the fundraising," the company said. It pledged that "if we move to review a specific plan, the board will closely examine the financial and business impact, faithfully follow the relevant rules and procedures, review the effect on existing shareholders along with any shareholder protection measures needed, and explain it fully."
"Several recent reports on Solidigm have raised concerns that existing shareholder value could be impaired, linking the matter to duplicate listing," the company said. "Memory is a capital-intensive industry in which the industry cycle and the timing of investment have a significant bearing on competitiveness, so how we deploy investment resources — internal funds, outside capital and other means — is a matter to be reviewed in light of market conditions, investment timing and the company's financial position."
Solidigm is weighing an IPO in the United States at a valuation of up to $150 billion (about 204 trillion won). Its business overlaps with that of parent SK hynix, and its revenue and operating profit are already consolidated into SK hynix's results. That has fueled concerns that a separate listing could dilute the value of SK hynix shareholders' stakes.
