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SK Telecom to conduct spinoff in November for future chip tech

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11th June, 2021 00:11 IST
SK Telecom, South Korea's top wireless carrier, decided on Thursday to spin off a new investment company in November to expand its foothold in new tech sectors, as well as conduct a 5-for-1 stock split aimed at improving shareholder value.

The wireless carrier's board of directors approved the spinoff plan, and the new company, tentatively named SKT Investment Co., will be split on November 1, according to a company regulatory filing.

Under the spinoff, SK Telecom's shares will be divided 6-for-4 between the remaining telecom-focused entity and the new investment firm.

The wireless carrier had announced the spinoff plan in April in a move to strengthen its tech subsidiaries and increase investment into new sectors, including the semiconductor industry, reports Yonhap news agency.

SKT Investment will serve as the holding company of 16 companies, including the wireless carrier's crown jewel and memory chip affiliate SK hynix Inc., e-commerce subsidiary 11Street, app market unit ONE Store, and T Map Mobility.

SK Telecom said the spinoff company will actively pursue mergers and acquisitions of semiconductor firms globally and collaborate with SK hynix in future chip technology.

SKT Investment will also pursue investment in other sectors, as well as initial public offerings for its subsidiaries. SK Telecom is currently preparing to publicly list ONE Store this year.

The remaining entity will largely focus on SK Telecom's traditional telecom business and also pursue new technology, including metaverse-based services and artificial intelligence.

The spinoff plan comes as toughened laws governing a holding company are set to take effect next year.

Under the revised fair trade law, a newly established holding company should hold a stake of 30 percent or more in publicly listed subsidiaries, up from the current 20 percent, putting pressure on SK Telecom to speed up plans for governance changes.

SK Telecom holds a 20 percent stake in SK hynix, the second-largest market cap company on South Korea's main KOSPI bourse.

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