Korea’s SK Square sells off entire stake in Grab as shares tumble

SK Square Co., the intermediate holding company of South Korea’s SK Group, has liquidated Grab Geo Holdings, a joint venture with Grab Holdings Ltd. by selling its entire stake in the Southeast Asian ride-hailing startup.

SK Square recently parted with Grab by selling its stake, which the Korean company bought in 2019 through its subsidiary Tmap Mobility Co. for 11 billion won ($8.5 million), investment banking industry sources said on Thursday. SK has reaped about 18.7 billion won in gains from its divestment, they said.

SK Group, through its various affiliates, invested a total of 257 billion won worth of shares in Grab between 2018 and 2021.

The stake sale by SK Square comes amid a sharp decline in the price of Grab's shares listed on the Nasdaq.

Shares in Grab Holdings are trading at $3.39 on the US tech-heavy junior stock market, down sharply from a high of $16 in December 2021.

Just a few years back, Grab attracted significant pre-IPO investments from big-name investors, including Toyota and SoftBank.

Korean venture capitalists, tech startups and automakers were among the major investors, buying Grab’s shares worth a combined 1 trillion won.

Specifically, Hyundai Motor Co. and Kia Corp. invested 311 billion won in Grab, followed by STIC Investments Inc. (223 billion won), a Naver Corp.-Mirae Asset Securities fund (167 billion won) and KB Investment (30 billion won).

Of them, Naver and Mirae Asset pulled out of Grab in 2021.

EXITS LESS LIKELY GIVEN LOW SHARE PRICE

Industry officials said most of the Korean investors likely posted evaluation losses from their investments following the sharp decline in Grab’s share price.

According to business reports of Hyundai Motor and SK, they purchased Grab at around 5,900 won per share between 2017 and 2018 and 7,012 won in 2019.

Following the Nasdaq listing in 2021, investors bought them at 16,500 won a share, according to industry officials.

They may also want to sell their stakes in Grab but any significant divestments won’t likely happen in the near future given Grab’s weak share performance, industry officials said.

Often dubbed the “Uber of Southeast Asia,” Grab has been diversifying its operations across Asia, evolving from a ride-hailing app to a Southeast Asian super app that offers several consumer services, including food delivery and financial services.

It operates in many Southeast Asian countries, including Singapore, Malaysia, Cambodia, Indonesia, Myanmar, the Philippines, Thailand and Vietnam.

Write to Jeong-Cheol Bae at bjc@hankyung.com

In-Soo Nam edited this article.