SK Telecom and KT Negotiating Swapping Stocks

The Ministry of Information and Communication (MIC) announced on the 31st that KT (former Korea Telecom) and SK Telecom are negotiating the sale of mutual stocks they have.

Han Choon-Gu head of Telecommunication Business Promotion Bureau in MIC said, “KT and SK Telecom are negotiating to lower their stakes in the other company by selling stocks. SK Telecom informed MIC its intention to sell the stakes in KT including stocks. `

He explained, “ they are searching for proper means including swapping of stocks. This negotiation covers SK Telecom’s KT stakes amounting 1.79 percent as a form of Exchangeable Bonds (EB) along with the each other’s stocks of the other company. ”

Mr. Han added, “SK Telecom will reduce its stakes in KT below 4.4 percent that the 2nd major shareholder Templeton Investment possesses solving the problem caused by its stakes in KT within this year. When the negotiation is broken off, we will enforce the regulation to prevent the invasion of users’ benefits, and to promote competitive system. ”

In relation with this, SK Telecom announced, “we will tune the difference between both companies, as KT prefers swapping of stocks, while we want to treat EB stakes. It may take rather long time, because the swapping has legal problems to solve. ”

Currently, KT has 9.27 percent of SK stakes and SK Telecom has 11.34 percent of KT stakes.

Im-Sook Ha artemes@donga.com