South Korea’s SK Innovation canceled the listing of its wholly owned subsidiary SK Lubricants, which manufactures and markets lubricating base oils and finished lubricants globally.
The decision, which was announced the day the IPO was supposed to price, came after the two-day book building session on April 25 and 26 failed to meet pricing expectations. SK Lubricants had offered a price band of KRW 101,000 (USD 94.43) to KRW 122,000 (USD 114.07) per share.
SK Lubricants had previously planned an initial public offering (IPO) worth up to KRW 1.56 trillion (USD 1.46 billion) in May.
Although it did not describe the scope of the under-subscription, according to reports, the appetite from foreign investors had been less than expected. The SK listing was one of three IPOs called off in Asia, due to market volatility that ensured they were not able to hit their price targets.
SK Lubricants is said to have a 39.3% market share of premium lubricating base oil sales globally. The company said that despite this setback, it will continue with its planned projects to improve base oil production at its joint venture projects with Spain’s Repsol and Indonesia’s Pertamina. SK Lubricants also plans to boost its overseas presence through joint venture base oil plants in North America and in China.
Proceeds from the planned listing were supposed to fund its expansion.
Meanwhile, SK Innovation announced plans to buy back KRW 1 trillion (USD 934.9 million) worth of its own shares within the next three months. The share buyback plan, which involves buying 5.2 million shares or 5.6% of the total, in the main KOSPI market, has been approved by shareholders.
“The decision is part of SK Innovation’s efforts to increase the shareholder value,” the company said in a release.