SK Holdings is aiming to turn itself into a portfolio investment company by launching US$200 million worth M&A funds abroad. It has been said that the holding company has completed the reshaping of overseas business units and the recruiting of M&A experts to this end.
In general, holding companies earn profits by means of dividend incomes from their subsidiaries and brand royalties. SK Holdings’ idea is to think out of the box and transform itself into a portfolio investor so as to become capable of making profits on its own and further enhance its corporate value. It has recently reformed its overseas organizations revolving around the 10 or so regions, including the US, China, Southeast Asia, and Latin America. At the same time, it has hired a number of professional experts experienced in the field.
Its project for the establishment of regional funds for overseas M&As is picking up speed, too. Last year, it set up a private equity fund with the Dogus Group in Turkey, each investing US$50 million. The financial resources are going to be invested in various new business projects in Turkey in the telecoms and energy infrastructure fields. In addition, it is about to launch a US$100 million fund with the Aval Group, the largest financial and telecoms group in Columbia.
“Korean holding companies are heavily dependent on dividend income and brand royalties,” said SK, adding, “However, we are planning to make a new type of holding company which makes profits through its own investment activities and boosts its corporate value for itself.”
The reform drive follows directives from Chairman Choi Tae-won. He has emphasized the importance of self-driven growth for a while, saying, “From now on, never ask the holding company about things related to subsidiaries.” Under the circumstances, it is expected that the group’s decision-making process and discussion of major issues will be handled mainly by the SUPEX Committee, while the holding company will focus more on its role as an investment company.