KT to sell 2 affiliates, put focus on ICTKT, the nation’s second-largest mobile carrier, said yesterday that it will sell KT Rental and KT Capital in a bid to focus on its ICT business.
“The sale of these affiliates is to concentrate on KT group’s ICT capabilities and we think that it will help our growth and competitiveness,” the company said in a release, adding that it will soon select advisers to manage the sales process.
The decision by KT Chairman Hwang Chang-gyu, who took the helm in late January, follows comments he made in his first press briefing last month that the telecommunications giant will slim down by restructuring its affiliates that aren’t competitive or don’t complement its ICT businesses.
KT Rental, founded in October 2005, is Korea’s No. 1 car rental service provider with 1,084 employees. It merged with Kumho Rent-A-Car in 2010 and has been operating under the brand name “KT Kumho Rent-A-Car.” The company had revenue of 885.2 billion won last year ($873 million) with operating profit reaching 97 billion.
KT Capital, founded in December 2006, has 175 employees and had revenue of 220.2 billion won and operating profit of 47 billion won in 2013.
Although these two companies are cash generators, industry insiders speculate that the sales of KT Rental and KT Capital show that Hwang is dedicated to restructuring KT.
In April, KT started an early retirement program to which 8,320 or 26 percent of its total employees applied, the largest number of early retirees in the company’s history.
Hwang, the former president of Samsung Electronics, has been working to enhance the group’s profitability. KT saw its first quarter revenue drop 4.2 percent to 5.84 trillion won, while its operating profit plunged 58.6 percent to 152 billion won.
BY Joo Kyung-Don [email@example.com]
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