S.Korea's LS Cable to become KT Submarine's largest shareholder

South Korea’s leading cable manufacturer LS Cable & System Ltd. is poised to become the largest shareholder of undersea cable construction firm KT Submarine Co.

LS recently confirmed its plan to secure KT Submarine’s management right by exercising a call option to buy additional shares next year and hold a total 44% stake, according to industry sources on Nov. 4.

Through the deal, LS is set to strengthen its cable business in renewables such as offshore wind power, an industry source said.         

Last month, LS said it will buy KT Submarine’s 4 million new shares for 25.2 billion won ($17.9 million) by this December, becoming the No. 2 shareholder with 15.57% after telecom service provider KT Corp. with 37%.

As the LS Group’s cable manufacturing arm beefs up new business in renewables, it's determined to acquire an additional 26.43% stake, or 6.3 million shares, in the undersea cable firm between April and July 2023.

LS sees the US undersea cable market expanding in tandem with the growth of the offshore wind power industry.

"The US has less than 20% domestic-made products in the offshore wind power sector, and in the US undersea cables are in short supply. So we see potential opportunities for Korean cable makers,” an LS official said.

LS intends to ramp up its competitiveness by combining its undersea cable manufacturing knowhow with KT Submarine’s underwater construction and ship operations.

LS expects this to create a synergy effect when it receives undersea cable orders via a turnkey contract, under which the contractor is responsible for both design and construction. In the past, LS often rented ships from abroad and assigned construction and engineering to outsourced companies.

In addition to renewables, the cable manufacturer is eyeing a cash cow in electric vehicle parts such as batteries, semiconductors and auto parts under LS Group Chairman Koo Ja-eun, who took the helm in November 2021.


Write to Ji-Eun Jeong at jeong@hankyung.com
Jihyun Kim edited this article.