KT to sell financial security unit for $59 mn for restructuring

South Korea’s KT Corp. is set to sell Initech Co., its Kosdaq-listed financial security unit, for 85 billion won ($59.1 million) as the leading telecom service provider seeks to shed non-core assets for restructuring.

Initech said on Wednesday its two largest shareholders – KT DS Co. and H&C Network – signed a binding memorandum of understanding to sell their 57% stake to a venture capitalist and a private equity firm in the country.

KT DS is KT Corp.’s information technology (IT) service subsidiary and H&C Network is the telco’s staffing agency unit.

Initech’s stock on Thursday ended up 1.4% at 4,050 won after surging to 4,500 won during the session, the highest level since April 2023 as the new owners are expected to improve the profitability of the unit.

RESTRUCTURING

KT Corp. has sought to sell Initech since 2024 for restructuring.

A local builder inked an MOU to buy the financial security company last November, but the agreement collapsed.

Initech’s operating loss increased to 3.5 billion won last year from 2.5 billion won in 2022 and 200 million won in 2021 when KT DS acquired it. Sales also fell to 45.6 billion won in 2024 from 53.8 billion won in 2022.

Some of Initech’s businesses also overlap with those of KT DS.

Both companies provide system integration (SI), financial IT outsourcing (ITO) and other services.

Write to Da Eun Choi at max@hankyung.com
 
Jongwoo Cheon edited this article.