KT becoming a 'holding-type company' materialized... stock market positive

Koo Koo, CEO of KT, once again expressed his will to transform into a holding company. The plan is to reorganize the business organization so that it can efficiently manage 50 affiliates, and to make it similar to an intermediate holding company in which the central company for each business has affiliates.

After meeting with reporters after a meeting between Minister of Science and ICT Lee Jong-ho and CEO of the three telecommunication companies on the 11th, CEO Koo said, Internally, we are conducting research and review on the conversion to a holding-type company and consulting is in progress. I think a concrete plan will come out by the end of this year, he said.

Earlier, at the general shareholders' meeting held in March, Koo expressed his will to convert to a holding company type. At the time, CEO Koo emphasized, We are not a holding company, but we are clearly interested in converting to a holding company. He explained that KT's stock price can be raised by adjusting subsidiaries, separating the headquarters business, and converting to a holding-type company.

■ A look at the concept of KT holding company

CEO Koo envisions dividing KT affiliates into media, finance, and customer service. In the media field, Media Genie, Storywiz, Genie Music, and Milly's Library have already been organized as subsidiaries centering on Studio Genie. Studio Genie effectively acts as an intermediate holding company and leads media content planning, production, and distribution.

In the financial sector, it has a structure with BC Card as the center and K-Bank below. In the customer service field, KT CS was placed under KT IS.

In addition, the industry believes that KT can deploy its business structure in various ways. KT SAT in charge of satellites, KT Linkers in charge of public phones, and KT Submarine in charge of submarine cables can be grouped into the network infrastructure sector, and KT Alpha and Nas Media can be linked in the commerce sector as well.

KT is also considering ways to separate various business units located inside into affiliates or IPO of affiliates. Based on this, it is analyzed that synergies between each affiliate can be created. KT launched KT Cloud in April by separating the cloud and Internet data center (IDC) fields. In May, Miliuiseojae submitted a request for preliminary examination for listing, and K-Bank also plans to conduct an IPO in the second half of the year.

■ Securities are positive for KT's conversion to a holding company

In the securities market, there is a forecast that this is a foreshadowed procedure because if KT reorganizes its business structure, it can create synergies among affiliates in various ways. The reason for the transition to a holding company rather than a holding company is that it has financial affiliates BC Card and K-Bank. According to the principle of separation of finance and industry, it is difficult to convert to a holding company in the legal sense.

The separation of finance and industry is a system in which banks, which are financial capital, and companies, which are industrial capitals, cannot own each other's industries or control more than a certain share. This is because there are concerns that various side effects such as limited market competition may occur if industrial capital dominates the financial industry. It is predicted that KT will accelerate the transition in the direction of separating new businesses, leaving only the group's leadership role and core assets, and developing each affiliate on its own.

The stock market is positive about KT's transformation into a holding company. Kim Hong-sik, a researcher at Hana Financial Investment, predicts that KT will convert into a holding company in earnest next year. will be, he said. It is explained that the spin-off could be an opportunity to reassess the business subsidiaries.

Nam-gon Choi, a researcher at Yuanta Securities, also said that conversion to a holding company was impossible due to legal restrictions, but said, We divide each business into subsidiaries by maintaining network assets and intangible assets with KT and handing over only services such as sales and operation to the subsidiaries to be split. Even if it does, it may not convert to a holding company.