Korean KT Cloud to raise $452 mn from IMM via rights offering

KT Cloud Corp., a subsidiary of South Korea’s telecom giant KT Corp., is set to raise 600 billion won ($452 million) from a unit of Seoul-based private equity powerhouse IMM Holdings Inc. through a rights offering.

KT Cloud said on Thursday it sold 2.7 million new shares to IMM Credit and Solutions Inc., a wholly owned subsidiary of the major local PE group’s holding company, in a filing to a financial regulator. IMM Credit and Solutions reportedly estimated KT Cloud’s corporate value at around 4 trillion won, according to investment banking industry sources.

South Korea’s No. 2 cloud service provider has been trying to sell a stake worth up to 1 trillion won since last year, for which major PE firms at home and abroad including Kohlberg Kravis Roberts & Co. raced despite the downturn in the investment industry due to rising interest rates.

The stake sale had hit a roadblock, however, as its parent KT faced protracted a leadership vacuum amid political meddling earlier this year.

The telecom behemoth spent 1.6 trillion won in kind and 150 billion in cash to establish KT Cloud in April 2022.

The company makes up about 20% of South Korea’s cloud industry, following Amazon Web Services Inc., a subsidiary of the world’s leading e-commerce operator Amazon, which dominates the local market with a market share of more than 50%.

KT Cloud is the country’s top internet data center operator with 14 facilities, far more than the No. 2 player LG Uplus Corp., which owns six centers.

Write to Jun-Ho Cha and Jong-Kwan Park at chacha@hankyung.com
 
Jongwoo Cheon edited this article.