SK Group Changes into
Holding Co. Structure

Group Chairman Chey Tae-won retains chairman-CEO of SK Holdings Company and SK Energy Company

SK Group has officially inaugurated a holding company structure on July 1. The group split the existing SK Corp. into its holding company, SK Holdings Company Ltd. and a new operating company, SK Energy Company Ltd.
SK Holdings Company and SK Energy Company began their official business with respective ceremonies inaugurating separate board of directors on July 2.
SK Group Chairman Chey Tae-won and President Park Young-ho were appointed to be representative directors of SK Holdings Company in its first board of directors meeting held on July 2. SK Energy Company also appointed Chairman Chey and President Shin Heon-cheol to become its representative directors.
As a result, the Board of Directors of SK Holdings Company is composed of five directors - Chairman Chey and President Park from the company as well as Prof. Suh Yoon-seok, of Ewha Womans University, President Gang Chan-soo, of Seoul Securities, Park Se-hoon, ex-CEO of Oriental Global as outside directors. The Board of Directors of SK Energy Company comprises nine directors, including three inside directors - Chairman Chey and President Shin and Executive Director Park Jun-ho.
SK Holdings Company has six offices and one center - Ethics Management Office, Planning Office, Business Support Office, Financial Office, Manpower Office, Brand Management Office and KKMS Implementation Center - under the direct control of the CEO of the company. The holding company is manned by 70 elite staff members, while Life Science Business Division, controlled by the holding company, has about 120 staff members. SK Holdings Company is operated mainly by dividends.
SK Holdings Company Chairman-CEO Chey said during his appearance of the business group's in-house broadcasting program on July 2, "The change into a holding company structure mean another challenge and changes facing us. "Now that the growth of the holding company cannot be imagined unless the business company grows, our holding company is going to continue to make investments into potential areas for growth and seek a global portfolio, "He touched on the significance of inaugurating the holding company, background and major directions of management during the program, titled "Inauguration of Holding Company, Talk with Chairman Chey Tae-won,"that was televised in the morning of July 2.
SK Corp. shareholders at the Extraordinary General Meeting held on May 29 in Seoul overwhelmingly approved the company's shift to a holding-company structure and the split into two entities: SK Holdings Company Ltd. and SK Energy Company Ltd. Shareholders at the meeting showed their strong support for the SK Corp. Board's recommendation. Out of a total of 130,453,410 outstanding shares, 79.7 percent of shareholders participated in the voting and they all voted in favor of the special resolution creating the new structure.
The shift to the new structure is designed to enhance business focus for both the holding company and the operating company, and will continue to pursue transparency and good corporate governance.
SK Corp.'s structural reorganization splits the company into a holding company and an operating company. The new holding company, SK Holdings, will concentrate on business investments, while SK Energy, the operating affiliate, will focus on the energy and chemical businesses. SK Holdings will also carry out the role of an incubator for new business areas, taking charge of the life science business sector.
"This important restructuring is the result of our shareholders' support for the progress we have made, creating value in our businesses," said SK Corp. Chairman & CEO Chey. "We thank them for their trust in us, and we look forward with confidence to the increased focus and efficiency in each of our subsidiaries. We believe we can achieve great results for all our global stakeholders."
SEPARATE LISTING. In support of the goal of increasing the value of each company, the two entities were listed separately on the Korea Stock Exchange (KSE). The split-off was effective as of July 1, 2007. Trading was suspended for existing shares on June 27 at the closing of the KSE. SK Holdings and SK Energy will be listed and begin trading separately on July 25.
SK Energy to Make Aggressive Investments into Overseas Exploration
SK Energy President Shin Heon-cheol said his company will put more energy into petroleum in a bid to evolve into a global total energy player.
SK Energy President Shin said, "ormer SK Corp. was a company of processing crude oil and marking petroleum products. The newly launched SK Energy is now focusing on prospecting oil fields and securing mining blocks."President Shin made the remark in his first meeting with reporters in the SK Group headquarters in Seolin-dong, Jung-gu, Seoul, on July 13 since SK Energy was split as an operating company from its new holding company, SK Holdings Company.
Former SK Corp. had virtually served as a holding company of the SK Group and had difficulty in concentrating on his own businesses on petroleum and gas, SK Energy President Shin said, adding that SK Energy aims to make aggressive investments with the goal of raising the capability of securing crude oil from current 510 million barrels to 1 billion barrels by 2015 and increasing its ranking of global petroleum companies from 70th to 30th.
To this end, he said, SK Energy plans to raise its investments into energy resources to 540 billion won, about 59 percent jump from 340 billion won in 2006.
SK Energy posed 336 billion won in sales from petroleum development, accounting for 1.4 percent of the company's total sales, but the business division's operating profits were tallied at 215.1 billion won, taking up nearly a 20 percent share of the company's total operating profits. SK Energy participates in the exploration of 25 mining blocks in 14 countries across the world, and it has secured 510 million barrels in stake sharing. nw

SK Group Chairman Chey Tae-won

SK Energy President Shin Heon-cheol