■ Board of Directors approved capital increase for shareholder allocation and Vice Chairman Kim Jun sent a shareholder letter on the 23^rd

■ To secure investment funds for future new growth businesses, strengthening R&D capabilities, and establishing a stable financial structure

■ Expecting to improve the profitability of battery business and increase the company’s corporate value, granting existing shareholders the right to subscribe to new shares

SK Innovation continues to build a virtuous cycle of “stability and growth” by making a paid-in capital increase worth about KRW 1 trillion. Following the successful large-scale financing of its subsidiary SK On (battery business), this is a preemptive step of SK Innovation in securing investment funds for future new growth businesses, strengthening its R&D capabilities, and establishing a stable financial structure, which are essential for the acceleration of innovation in the future.

SK Innovation has announced today that its Board of Directors (BOD) decided to make a paid-in capital increase worth KRW 1.18 trillion. The planned issue price is KRW 143,800 per share, and 8.19 million new shares (ratio: 8.7%) will be issued. The final issue price will be confirmed in upcoming September. The paid-in capital increase is going to be carried out through general public offering of forfeited stocks after the shareholder allocation process.

Vice Chairman & CEO of SK Innovation Kim Jun explained the background of this decision through a shareholder letter after the public announcement of the paid-in capital increase. “As we innovate to transition from ‘Carbon to Green’, the Company has made sizable investments in battery and other green businesses,” Vice Chairman Kim explained. “Furthermore, we will expedite the development of new green businesses including the next-generation Small Modular Reactor (SMR), hydrogen/ammonia, energy solutions, and waste-to-energy to consolidate our position as the ‘Green Portfolio Designer & Developer’ in the field of future energy,” he continued.

SK Innovation announced through its “Carbon to Green” strategy revelation in 2021 that it would increase the proportion of green assets from 30% (by 2020) to 70% by 2025 and change the company’s business structure to a green-centered one. Since then, the electric vehicle batteries and separators (LiBS) business have risen in the global ranks, and the company is actively preparing to establish a green campus to strengthen next-generation energy investment, new business development, and R&D infrastructure. Vice Chairman Kim added, “Aside from the paid-in capital increase, SK Innovation will exert strenuous efforts via diverse measures such as asset rationalization so as to achieve financial stability.”

Vice Chairman Kim also explained how the company will protect shareholder value. “We expect there to be a renewed market assessment on SK Innovation’s corporate value as SK On’s profitability improves quickly buoyed by the US AMPC program’s tax credit benefits and increase in overseas plant productivity.” “Therefore, we decided to offer shareholders the rights to subscribe to the newly issued shares.”

He continued, “SK Innovation shared its policy on mid to long-term shareholder return in conjunction with SK On’s future IPO during the ‘Dialogue with Shareholders’ session last March.” “The Company’s strong commitment to shareholder return still remains valid and we will also explore ways to utilize the treasury stocks owned by the Company to enhance shareholder value.”

Vice Chairman Kim said, “Aside from the paid-in capital increase, SK Innovation will exert strenuous efforts via diverse measures such as asset rationalization so as to achieve financial stability.” He ended the letter by thanking the shareholders’ “unwavering support and for continuing to join us on our journey.”