The board of Korean telecoms operator KT Corp has outlined plans to spin-off its satellite business by the end of the year.
The proposed transaction, which will take the form of a simple vertical spin-off whereby all of the shares in the new company…
The board of Korean telecoms operator KT Corp has outlined plans to spin-off its satellite business by the end of the year.
The proposed transaction, which will take the form of a simple vertical spin-off whereby all of the shares in the new company will be allocated to the parent company, will be voted on at an extraordinary shareholder’s meeting on 20 November. If it is approved then the spin-off is expected to take place on 1 December 2012.
KT Corp has tentatively called the new business KT Sat and it will comprise the parent’s lease business of satellite repeaters and devices and its satellite services business.
The company has estimated that KT Sat will have a total equity value of approximately W404.27bn (US$363.5m) with assets of W424.9bn (US$382m) and liabilities of W20.6bn (US$18.5m). KT also estimates that its satellite business generated revenues of W127.2bn (US$114.4m) in its fiscal year 2012.
Well-placed sources have told SatelliteFinance that the spin-off is likely to be the precursor to an eventual sale of the business in 2013.
Despite having sold a number of its spacecraft, including Koreasat-3 to satellite operator Asia Broadcast Satellite in May 2010, KT Corp remains active in the industry.
It still owns Koreasat-5 and Koreasat-6, and has a multi-million dollar transponder lease agreement with ABS for ABS-2 satellite, which is scheduled to be operational by Q1 2013.
The company also leases capacity from Intelsat and AsiaSat as well as offering a number of Inmarsat services including BGAN and its Global Satellite Phone Service (GSPS).
