SK hynix plans $12.1 billion special dividend, returning Kioxia stake sale proceeds to shareholders

SK hynix is reportedly set to return the bulk of the large gains from selling its Kioxia stake directly to shareholders in the form of a special dividend.

Citing investment banking sources, South Korea's Dong-A Ilbo reported that SK hynix plans to pay a special dividend of about 16 trillion won (roughly $12.1 billion), funded by proceeds from the sale of its stake in Japanese memory chip maker Kioxia.

The plan is expected to be officially announced on Wednesday, October 28, when SK hynix releases its third-quarter earnings.

It is estimated that SK hynix sold down its Kioxia holdings in both the first and second quarters, generating combined net profit of about 20 trillion won (roughly $15.1 billion) after deducting the original investment cost.

The proposed special dividend of 16 trillion won is equivalent to about 80% of that net profit.

When Bain Capital led the acquisition of Toshiba Memory (later renamed Kioxia) in 2018, SK hynix used two SPCs (special purpose companies, often used to isolate debt and legal risk) to separately buy Kioxia shares and convertible bonds. As Bain sold off its final batch of Kioxia shares this year, SK hynix also gradually completed the liquidation of its holdings in the company.