Telecom giant KT considers turning into holding company structure

KT Corp., a major South Korean telecommunications company, is considering changing into a holding company structure in an effort to boost the company’s and its affiliates’ corporate value.

At the company’s annual general meeting on Thursday, Chief Executive Ku Hyeon-Mo also said it is seeking initial public offerings of two unlisted units – subscription-based e-book service provider Millie’s Library and K Bank, Korea’s first internet-only bank.

“Certainly, we are interested in turning into a holding company style group, a move that we believe will boost our enterprise value,” he said.

If his ideas are realized, the holding firm will work as an investment and M&A entity, while placing the telecom company and other affiliates such as KT Studio Genie and BC Card Co. under its wing, according to industry watchers.

The market has for years expected the telecom giant to transform into a holding company as KT’s market capitalization stands at a mere 9.3 trillion won ($7.6 billion), whereas its asset value exceeds 30 trillion won.

“KT’s affiliates have strengths in their respective business areas, although they are not fairly valued. A holding company structure will boost the parent company’s and its affiliates’ enterprise value,” said Daishin Securities analyst Kim Hoe-jae.

Shares of KT rose 0.3% to 35,800 won in early Friday trade after advancing 3.8% the previous day on the CEO’s remarks on possible corporate restructuring.

MILLIE’S, K-BANK SET FOR IPOs

The chief executive also said at the shareholders’ meeting that the company will push for the IPOs of Millie’s Library and K-Bank by the end of this year or early next year.

One of Korea’s leading e-book platforms, Millie’s Library is touted as the industry’s pioneer that led the fast spread of the subscription service among Korean readers who previously preferred purchasing and owning e-books rather than subscribing.

Last year, the company chose Mirae Asset Securities as its underwriter for an IPO of Millie's Library.

K-Bank, which is 34% owned by BC Card, a subsidiary of KT, was previously expected to go public as early as 2023.

Just like other digital lenders such as Toss Bank and KakaoBank Corp., K-Bank, which began operations in 2017, focuses its business on addressing the financial needs of citizens and smaller business owners with low credit ratings.

Meanwhile, KT Co-CEO Park Jong-ook stepped down from his post as the National Pension Service, a major KT shareholder, opposed his reappointment as an inside director. He is undergoing a trial on charges of illegal fundraising for politicians.

Write to Da-Eun Choi at max@hankyung.com
In-Soo Nam edited this article.