SK hynix Reportedly Becomes Largest Shareholder of Japan's Kioxia

According to ZDNET citing Nikkei, Kioxia has disclosed that its largest shareholder has changed from the former Toshiba to a company named BCPE Pangea Cayman 2 (hereinafter referred to as SPC2), established by Bain Capital.

From the 15th of last month to the 3rd of this month, Toshiba reduced its stake to 14.06% through a total of seven transactions. As a result, SPC2, which holds a 14.19% stake, became Kioxia's largest shareholder.

Kioxia's annual report reveals that SK hynix holds bonds convertible into "substantially all" of the voting rights of BCPE Pangea Cayman 2. It is reported that SK hynix continues to hold SPC2, with its investment amounting to approximately KRW 1.3 trillion. If these convertible bonds are converted into shares, SK hynix will become a shareholder of Kioxia and possess voting rights.

Additionally, in the report, Kioxia explicitly cites SK hynix's interest claim as a risk factor, stating that it could potentially lead to conflicts of interest. SK hynix had participated in the Bain Capital-led consortium's acquisition of Kioxia in 2018. However, as part of the transaction terms, SK hynix committed that, unless permitted by Kioxia, its voting rights in Kioxia would not exceed 15% until 2028.