SK Group puts securities affiliate up for sale

SK Group is bowing out of the financial business, putting its only financial affiliate, SK Securities, up for sale.

The conglomerate’s holding company, SK Holdings, said Thursday that it would sell its 10 percent stake in SK Securities. The group is in a rush to shed its shares by August, when SK Holdings as an industrial holding company is no longer allowed to own stakes in financial firms.

SK Holdings obtained its 10 percent stake from SK C&C, the group’s IT affiliate, in 2015 as part of a merger to simplify its corporate governance structure.

Samjong KPMG will handle the deal and said it would send an investment prospectus to interested parties soon. The timing is tight if it wants to complete the deal by August.

The market cheered the move with SK Securities ended at 1,780 won ($1.60) per share on Friday, up 7.23 percent from the day before. SK shares went up 1.25 percent to 283,000 won on Friday.

Based on the current market capitalization, the 10 percent stake could be worth 53 billion won in book value, but the management premium can push up the price of the shares.

Some market observers earlier expected other SK affiliates to take over SK Securities to keep the company, but the group chose to make a full exit from the financial industry. The decision falls in line with a strategy to focus on certain segments where SK Group has competitiveness.

When the conglomerate announced its corporate restructuring in 2015, it outlined five areas for growth, including information technology, energy, biomedicine, semiconductor materials and modules. Finance was not one of them.

SK Group also set a goal of turning the conglomerate into a major global player with annual revenue of 200 trillion won and pretax profit of 10 trillion won by 2020.

With 423.4 billion won in capital, SK Securities is considered a small player in the local securities industry. As financial authorities have pushed for consolidation in the industry, a few small and midsize brokerages like HI Investment & Securities and eBest Investment & Securities have been put up for sale.

Founded in 1955, SK Securities started as Shinwoo Securities but changed its name after SK Group purchased the company in 1992.

BY PARK EUN-JEE [park.eunjee@joongang.co.kr]