Inside the 3 Trillion Won KKR and IMM Investment in "SK Horizon": How SKT Kept Its 51% Stake [fn Market Watch]

[Financial News]  SK Telecom has drawn attention by adopting a two-step structure of "selling existing shares first and then issuing new shares" as it opens up 49% of its AI infrastructure subsidiary, SK Horizon, to global private equity firms Kohlberg Kravis Roberts & Co. Inc. (KKR) and the IMM Investment-Stonebridge Capital consortium. The structure allows SK Telecom Co., Ltd. (SKT) to raise cash directly while also injecting growth capital into the newly established company, ultimately leaving it with a 51% controlling stake.
According to the investment banking industry on the 27th, KKR and the IMM Investment-Stonebridge consortium will invest a total of 3.08 trillion won in SK Horizon.
Not all of the capital will go directly into SK Horizon. In the first step, SKT sells its existing shares in SK Horizon. KKR and the IMM consortium will invest about 1.8811 trillion won to acquire SKT's stake. Once this step is completed, SKT's ownership will fall from 100% to about 63%.
In the second step, SK Horizon will issue about 1.2 trillion won worth of new shares to KKR and the IMM consortium. As the new funds flow directly into the company, SKT's stake will ultimately decline to 51%. KKR and the IMM consortium will hold 29% and 20%, respectively.
In effect, about 61% of the 3.08 trillion won will be used as proceeds from SKT's sale of existing shares, while the remaining 39% will serve as new growth capital for SK Horizon.
The investment banking industry sees this structure as the key feature of the deal.
An investment banking industry source said, "SKT is monetizing part of its AI infrastructure business while keeping 51% to maintain control," adding, "At the same time, the new share investment strengthens SK Horizon's own financial capacity, allowing the company to share the capital burden for future data center expansion with financial investors."
The financial investors are not simply investing in a new data center development project. SK Horizon already includes eight data centers in operation, as well as AIDC facilities under construction in Ulsan at 103 MW and in Guro District at 75 MW. The total infrastructure amounts to 318 MW. It also includes a submarine communications cable business.
The appeal for KKR and the IMM consortium appears to lie in the ability to pursue upside from new AIDC development while also relying on the cash flow generated by existing data centers. That is why the deal is being viewed less as a bet on a single data center and more as an investment in an "AI digital infrastructure platform" that can add more assets over time.
SK Telecom will oversee the overall AIDC strategy and global big tech partnerships, while SK Horizon will handle the operation and expansion of existing data centers and submarine communications cables. SK Hyper will be responsible for developing new GW-scale AIDC facilities.
Another investment banking industry source said, "Combining existing shares and new shares allows SKT to achieve two goals at once: recovering its investment and securing growth capital for the new company," adding, "In particular, the fact that the structure was designed so SKT keeps 51% and financial investors take the remaining 49% suggests an intention to pursue large-scale AI infrastructure investment together with outside capital."


[email protected] Kim Kyung-a Reporter