SK Shieldus drops IPO on lukewarm demand from investors

South Korean leading security services provider SK Shieldus Co. has scrapped its plan to go public this month. Its bookbuilding gained tepid investor interest as the US Federal Reserve’s interest rate hike chilled market sentiment. 

The company, owned by SK Square, a spinoff of telecom giant SK Telecom, said it submitted a delisting notice to Korea’s financial regulator on Friday. Its corporate value is not properly estimated under the current market conditions, the company said.    

The company saw 200-to-1 competition at the IPO’s bookbuilding for institutional investors held on May 3 and 4. That compares with 2,023 to 1 at LG Energy Solution’s IPO in January and an average of 96 to 1 at other local IPOs during the first quarter, excluding public offerings of special-purpose acquisition companies (SPACs) and real estate investment trusts (REITs).

The public offering price band was set at between 31,000 won and 38,800 won, with the market capitalization calculated at 2.8 trillion won to 3.5 trillion won. Market watchers say the market cap was too high, compared with 2.5 trillion won for S-1, a Samsung Group affiliate and Korea’s top security solutions provider.

SK Shieldus once mulled lowering the price band by 20% to attract more investors.  But it decided to drop the IPO plan after seeing some institutional investors cancel subscriptions at the end of its book building.

“The majority of institutional investors gave us positive feedback on our fundamentals, such as growth, profitability and stability, but we saw investor confidence shrink rapidly over the past few months due to the growing uncertainty of global macroeconomic conditions. Thus, we have decided to withdraw going public and review the plan again in the future when the corporate value is properly assessed,” an SK Shieldus official said.

“Also, we will strengthen our competitive edges of cybersecurity and converged security, which investors highly valued during the IPO process,” the official added. 

The security firm will renew its IPO push as Macquarie Korea Asset Management, an investor of SK Shieldus, requires the company’s IPO by 2023.

Yet it is unlikely to pursue an IPO again in the first half of this year due to the so-called “135 days rule.” It requires companies to complete their IPOs within 135 days of drafting financial statements, which include offering circulars and securities registration statements to overseas investors. SK Shieldus has to complete its IPO by mid-June with the securities registration statement it has submitted; now, they’re expected to go public in the second half of 2022 or the following year.


Four Korean companies -- Hyundai Engineering Co., Voronoi Inc., Daemyung Energy Co. and SK Shieldus -- have withdrawn their IPO plans. Daemyung Energy is renewing its IPO push this month.

Write to Ye-Jin Jun at ace@hankyung.com
Jihyun Kim edited this article.