Foreign ownership of South Korea's top mobile carrier SK Telecom Co. has tumbled to a 15-year nadir, data showed Sunday, amid growing skepticism over the company's plan to reshape its business line.
In November last year, SK Telecom signed a deal to acquire CJ Hellovision Co., South Korea's top operator of cable channels and Internet TV content, unveiling a plan to merge it with its wholly owned subsidiary SK Broadband Co.
According to the data by the Financial Supervisory Service and the Korea Exchange, foreign holdings of SK Telecom shares stood at 39.2 percent as of Thursday.
(Yonhap)
It was the lowest foreign ownership level since January 2001, when the figure reached as high as the legal cap of 49 percent.
At the start of the second half last year, foreign ownership of SK Telecom flirted with 45 percent, but it sank below the 40 percent mark following the announcement of the takeover deal.
Market watchers attributed the foreign selloff of SK Telecom to its move to purchase CJ Hellovision, which comes amid a worsening business environment.
An analyst said offshore investors seem to be lukewarm about the effect of the takeover despite SK Telecom's claim that it is in keeping with a global trend of communications and broadcasting convergence.
"The media platform business is unlikely to turn a profit anytime soon," said a market researcher on the condition of anonymity. "With the market environment worsening, the takeover deal has detracted from SK Telecom's allure."
Last week, CJ Hellovision said in a regulatory filing that it will hold a shareholder meeting on Feb. 26. to approve the proposed deal.
South Korea's regulatory bodies have yet to give the green light to the plan. While the decision is expected to be made during the first quarter, it could be further delayed due to strong opposition from business rivals, according to watchers.
No. 2 mobile carrier KT Corp. and smallest player LG Uplus Corp. insist the deal will distort the market order, given SK Telecom's dominant position in the mobile network industry.
Meanwhile, foreign ownership of KT stood at the legal ceiling of 49 percent as of Thursday. (Yonhap)
