SK Telecom's plan to divide in two approved by board

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SK Telecom's plan to divide in two approved by board

SK Telecom CEO Park Jung-ho shares plans to divide the company into two entities during an online presentation in April. [SK TELECOM]

SK Telecom CEO Park Jung-ho shares plans to divide the company into two entities during an online presentation in April. [SK TELECOM]

SK Telecom will be dividing into two companies, one focused on core businesses and the other on investments and new areas.
 
Its board approved the plan Thursday, along with a 5-to-1 stock split, which is being undertaken to make the shares more accessible.  
 
The SK Telecom name will continue to be used as the name of the company that will inherit core phone, data and television businesses. A name for the new unit has not yet been decided.  
 
The spin-off ratio has been set at roughly 6 to 4 based on net asset value, with the surviving entity being the larger of the two.  
 
The split will be effective Nov. 1 following an extraordinary meeting of shareholders to be held on Oct. 12. The name of the new entity will be set before the shareholder meeting.  
 
The surviving entity will complete its listing change and the new entity will list on Nov. 29. Trading of SK Telecom’s shares will be suspended for a month from Oct. 26.  
 
The surviving company will take on the carrier’s existing telecommunications and home media businesses, such as IPTV, while focusing on expanding businesses related to digital technologies, like artificial intelligence, metaverse and the cloud. Metaverse is a 3-D virtual reality space where people can interact with computer-generated environments and virtual people.  
 
The new investment company will aggressively pursue mergers and acquisitions, SK Telecom said. Investments will be focused on semiconductor companies and technologies. The carrier said it is hoping the new investments will create synergies with SK hynix.
 
The new unit will also strive to attract domestic and overseas investment into various areas it has a presence in, such as security, online commerce and mobility. In the long run, it will pursue initial public offerings of its businesses.  
 
The investment company will take stakes in 16 subsidiaries and investments that were previously held by SK Telecom. SK hynix, ADT Caps, 11st, T Map Mobility, and SK Telecom CS T1 are among the 16. SK Telecom CS T1 is an e-sports company where SK Telecom and Comcast Spectator are the largest and second-largest shareholders. The surviving entity will keep all other subsidiaries, including SK Broadband.
 
A spokesperson from SK Telecom said ownership stakes will not change after the transfer: SK Telecom currently holds 20.07 percent of SK hynix, and the new entity will hold the same.  
 
After the stock split, the total number of SK Telecom’s issued shares will increase from 72,060,143 to 360,300,715, about 60 percent SK Telecom shares and about 40 percent new-entity shares.  
 
Shareholders will receive shares in both companies in that proportion, with any fractional shares being paid as cash.
 
“The spinoff will be the beginning of the era of SK Telecom 2.0,” SK Telecom CEO Park Jung-ho said.  
 
BY KIM JEE-HEE   [kim.jeehee@joongang.co.kr]
 
 
 
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