Equity Spinoff
On September 21, Hyundai Securities forecast that SK’s new growth business sector may be spun off within two or three years and the spin-off will the best way to increasing shareholder value.
“Business reasons and strategic reasons make the company form such a corporate governance structure,” said Jeon Yong-gi, a researcher at Hyundai Securities. According to Jeon, a spin-off is more appropriate to intensively grow new growth engine business sectors.
“The value of new growth business sectors is not applied and it is difficult to evaluate the sectors as the sectors are covered with sales and profits of SK Innovation, SK Telecom and SK E&S,” Jeon said. “The current mixed structure creates confusion and makes it difficult to evaluate new growth engine business sectors and motivate employees in those sectors. It may make the group reluctant to secure growth engines.”
If the IT service, bio, security, module, used car and new material sectors are separated, SK’s corporate value is highly likely to top ten trillion won in 2017, Jeon explained.