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Asia

SKT cybersecurity spin-off pulls plug on $2.8B IPO

Korea's SK Group has pulled the IPO of SK Telecom's former cybersecurity arm, citing weak investor interest.

The listing of SK Shieldus, slated for May 19, was intended to raise 3.55 trillion won (US$2.79 billion) in what would have been Korea's biggest IPO so far this year.

It is one of a clutch of Korean listings that have been abandoned in the past month as the economic outlook deteriorates.

"SK Shieldus decided to shelve its listing, as demand forecasting for the final IPO price showed its corporate value may not be assessed in a proper way," the company said in a statement, Yonhap reported.

SK said it would revive the listing in the future when market conditions and investor sentiment were more favorable.
 (Source: Ryan Pikkel on Flickr CC2.0)
SK said it would revive the listing in the future when market conditions and investor sentiment were more favorable.
(Source: Ryan Pikkel on Flickr CC2.0)

The firm was formed in 2020 in a merger between SKT's ADT Caps and the security equipment and services business owned by affiliate SK Hystec.

Sales last year totaled 1.55 trillion won ($1.21 billion), up 17%, making it Korea's second-largest security firm behind S-1, owned by rival chaebol - or conglomerate - Samsung, Yonhap said.

The company, which provides both cybersecurity and physical security services, changed its name from ADT Caps last October.

Calling it off

The company called off the IPO after encountering what it said was a lackluster response from institutional investors early this week.

Some analysts say they believe that the stock is overpriced. A Yuanta Securities report said the target price meant a market cap even higher than segment leader S-1.

SK said it would revive the listing in the future when market conditions and investor sentiment were more favorable.

But the collapse of the IPO also casts into doubt plans to list another former SK Telecom unit, One Store, sources told Korea Herald. The mobile app marketplace is scheduled to go public in the first half of this year.

The IPOs are part of a sweeping reorganization of SKT, aimed at maximizing the value of its existing non-core businesses, pivoting the company away from its core telecom operations and growing new businesses.


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SKT spun off SK Shieldus, One Store, ecommerce firm 11st Street and memory chip business SK Hynix to portfolio management company SK Square last November.

SK Square has said that it aims to triple the value of its portfolio companies to 75 trillion won ($59 billion) by 2025.

Under its new CEO Ryu Young-sang, SKT says it aims to become an AI and digital services company.

It says its mobile and fixed-line services accounted for 82% of revenue but were growing at just 3%, while the growth businesses were expanding at 15% (see SKT 2.0 forecasts growth surge from new businesses).

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— Robert Clark, contributing editor, special to Light Reading

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