SK Hynix eyes wastewater facilities sale for $770 mn

The company has been raising cash to bolster its financial health and fund new investments

SK Hynix completed the M16 Fab on its Icheon campus in Geyonggi Province in H2, 2022
SK Hynix completed the M16 Fab on its Icheon campus in Geyonggi Province in H2, 2022
Jeong-Soo Hwang 2
2023-07-11 11:32:51 hjs@hankyung.com
Mergers & Acquisitions

SK Hynix Inc. is in talks with its affiliate SK REIT Co. to sell the wastewater treatment facilities within its semiconductor campus in Icheon, Gyeonggi Province, for about 1 trillion won ($771 million), according to the company and industry sources.

The world’s No. 2 memory chipmaker said on Monday it will fix the sale price upon approval from the Ministry of Land, Infrastructure and Transport and complete the sale later this year.

Semiconductor industry sources estimate the deal value at about 1 trillion won.

To proceed with the deal, SK REIT submitted an application to the land ministry to set up a real estate investment trust (REIT), a vehicle used to purchase the facilities.

After the transaction, the chipmaker will lease it back.

“Recently, as the scale of semiconductor industry investment expands worldwide, there is an increasing trend to improve asset efficiency and financial soundness through asset securitization, as well as investment through borrowing,” SK Hynix said in a statement on Monday.

“In line with this trend, we are seeking to securitize the wastewater treatment centers, a non-core asset.”

A bird's eye rendering of SK Hynix's semiconductor cluster to be built in Yongin, Gyeonggi Province (Courtesy of SK Hynix)
A bird's eye rendering of SK Hynix's semiconductor cluster to be built in Yongin, Gyeonggi Province (Courtesy of SK Hynix)

SK Hynix Chief Financial Officer Kim Woohyun said in the statement the planned facilities sale is part of its asset-light strategy to boost asset efficiency and prop up the financial structure in the uncertain business environment.

The water treatment centers at Hynix's Icheon headquarters, 30 km east of Seoul, disposes of effluent from the chip manufacturing factories before discharging waste into the river.

The process is unlike that of purifying wastewater to be pumped into the etching process to carve patterns on the wafers.

SK Hynix has been ramping up efforts to secure cash since the start of this year.

In the first quarter, it raised 1.7 trillion won in corporate bonds and issued 2.2 trillion won worth of exchangeable bonds.

Additionally, it borrowed about 200 billion won from Hana Bank.

In the January-March period, the chipmaker reported its worst-ever quarterly operating loss of 3.4 trillion won.

(Correction: SK Hynix put all the wastewater treatment facilities within the Icheon semiconductor campus up for sale, not a single one.)

Write to Jeong-Soo Hwang at hjs@hankyung.com

Yeonhee Kim edited this article.
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