SK HERCULES CONFIRMED $3.98 TRILLION IN LOSSES DUE TO SWAP AND STOCK PRICE INCREASES

ACCORDING TO REGULATORY DOCUMENTS, SK HERCULES CONFIRMED IN THE FIRST HALF OF 2026 THE LOSS OF 3.98 TRILLION WON IN DERIVATIVES TRANSACTIONS RELATED TO THE EXCHANGEABLE BONDS ISSUED IN APRIL 2023. THE LOSS RESULTED FROM THE EXERCISE OF EQUITY SWAPS BY THE HOLDERS OF THE RELEVANT BONDS, AS WELL AS AN INCREASE IN THE PRICE OF SK HERCULES ' SHARES IN KOREA. SK HERCULES STATES THAT THE ACCOUNTING LOSSES DESCRIBED ABOVE DO NOT RESULT IN ACTUAL CASH OUTFLOWS; AT THE SAME TIME, THE RELATED LOSSES HAVE BEEN LARGELY OFFSET BY THE PROCEEDS OF STOCK UNIT DISPOSAL RECOGNIZED WHEN SWAPABLE BONDS WERE CONVERTED TO SHARES. IT STATED THAT ALL SWAPS HAD BEEN COMPLETED IN THE FIRST HALF OF THE YEAR AND THAT, AS A RESULT, THERE WAS NO VALUATION LOSS ON DERIVATIVES ASSOCIATED WITH THE SWAPS AT THE END OF THE PERIOD. (PEMBO)