SEOUL: The board of SK Corp has approved a US$712mil plan to bail out ailing sister company SK Global Co, paving the way for a lifeline from creditors due to meet today.
SK Global, saddled with 6.7 trillion won (US$5.6bil) of debt, has been on the verge of insolvency since a US$1.2bil accounting fraud was unearthed in March.
Last Saturday, British activist fund Hermes won an injunction in a Seoul court blocking three SK Corp board members from exercising voting rights, a day after the trio and seven other company executives were convicted of accounting fraud.
The rescue plan involves swapping 850 billion won of SK Global debt for new shares.
Creditors are set to meet to decide on a debt rescheduling package worth as much as 2.9 trillion won.
“From a commercial point of view, the board judged the debt-to-equity swap would be beneficial for SK Corp as well,” the company’s chief spokesman Lee Manwoo said. – Reuters