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Press Release
SK Telecom decided to convert its USD $1 billion Convertible Bonds acquired July 2006 into full shares
SK Telecom will rise to the second largest shareholder of China Unicom with 6.6% of shares and dispatch one director to China Unicomthe company by exercising its director appointment right
SK Telecom will reinforce its cooperative relationship with China Unicom across the telecommunications industry, including CDMA area
Seoul, Korea, 21 Aug 2007 - SK Telecom (NYSE:SKM) will widen its participation in the Chinese telecommunications market by converting bonds purchased from China Unicom into shares.
SK Telecom (CEO Shin Bae Kim, www.sktelecom.com) decided on August 20 to convert its Convertible Bonds (CB) issued by China Unicom,(CEO Chang Xiaobing, www.chinaunicom.com) China’s second largest mobile carrier, into full shares. In its disclosure issued on August 21, SK Telecom announced that it will strengthen cooperation with China Unicom by exercising its director appointment right.
In July 2006, SK Telecom purchased USD $ 1 billion CB issued by China Unicom Limited (SEHK: 0762 NYSE: CHU), a Hong Kong-based listed corporation of China Unicom. With converting the bonds into shares, SK Telecom will hold 6.6% of China Unicom shares, rising to the second largest shareholder of China Unicom.
The number of shares to be converted is 899,745,075 and the conversion price is HKD $ 8.63. About two weeks will be allowed for SK Telecom to accept the shares after applying for bond conversion. After conversion is completed, SK Telecom will dispatch one director to the company by exerting its director appointment right..
SK Telecom cited three reasons for its bond conversion; The stock price(HKD $ 12.16 as of August 20) has been staying steady over the conversion price level for a relatively long time; Investment risks are significantly reduced by Chinese government’s strong determination to protect investors; It would be better for SK Telecom to be a shareholder than remaining as a creditor to solidify its foothold to enter the Chinese market through stronger strategic partnership with China Unicom .
SK Telecom CEO Shin Bae Kim said, "The conversion will mark a turning point for SK Telecom to make a step forward in partnership with China Unicom on top of our existing collaboration in CDMA area. In this regard, SK Telecom will begin to take part in management of China Unicom via board of directors meeting. The encounter between SK Telecom’s advanced management expertise and the continuously expanding Chinese market will lead to creation of a new value."