As SK Telecom Co. is going through the process of liquidation for its Vietnamese unit, LG Electronics Inc., which made a joint investment in the unit, will not be able to withdraw about 72 billion won (US$67.07 million) worth of investment.
According to related industry sources on April 16, SK Telecom is taking procedures for liquidation for SK Telecom Vietnam.
SK Telecom Vietnam received a “limited” opinion from auditors for two years in a row from 2016 to 2017. Accordingly, it is hard for the company to survive. In South Korea, a listed firm is delisted when it receives a “limited” opinion from auditors for two consecutive times. SK Vietnam has recorded net loss after it ran into the red in 2012, and its holding company, SK Telecom, has decided to close down the unit.
SK Telecom Vietnam was jointly invested in by SK Telecom, LG Electronics and DongAhElecomm Co. in 2000. The three companies named it SLD Telecom after their first letter in the early days of establishment in the 2000s. However, they changed the name to the current SK Telecom Vietnam in 2008. SK Telecom had a 73.3 percent stake in the firm as of the end of last year, while LG Electronics and DongAhElecomm had a 25.4 percent and a 1.3 percent stake, respectively.
As SK Telecom has decided to shut down its unit in Vietnam, LG Electronics cannot avoid loss. LG Electronics invested 72.19 billion won (US$67.25 million) in SK Telecom Vietnam. However, LG Electronics will not be able to retrieve the investment since SK Telecom Vietnam now has net assets worth only 8 million won (US$7,452) according to LG Electronics’ accounting books.