SK Telecom announced on August 27th that it will spin off its wholly-owned subsidiary SK Broadband into the surviving company SK Broadband and the newly established company SK Horizon. Meanwhile, SKT has signed a final agreement with KKR managed funds and IMM consortium, a leading global investment firm, to invest a total of 3.08 trillion Korean won (approximately 2.3 billion US dollars) in equity in SK Horizon.

The surviving company SK Broadband will focus on innovation in fixed line, media, and enterprise businesses, while the newly established company SK Horizon aims to expand South Korea’s leading AI data center infrastructure. Based on the book value of net assets, the spin off ratios of the surviving company and the newly established company are set at approximately 0.84 and 0.16, respectively.

SK Horizon will be responsible for operating Seoul, Yisan (2 locations), Puntang, and Gashan Centum、 Eight data centers, including Yangzhou and Banqiao, have been put into operation, as well as the expansion of AIDC under construction in Ulsan and Jiulao, with a total capacity of 318 megawatts. The construction of submarine cable infrastructure required for global AI business will be promoted in stages.

SK Telecom plans to strengthen its AIDC operational expertise through SK Horizon and expand into diversified AI infrastructure businesses. The streamlined decision-making structure will help to more effectively raise funds for core business areas through external investments and other means.

SK Broadband’s current CEO Kim Sung soo will also serve as the CEO of the new company SK Horizon, and the appointment will be finalized through a board resolution after the establishment of the new company early next year.

Obtaining trillion won level investment, showcasing AIDC’s business strength and potential

Along with the spin off, SKT announced that it has signed a final agreement with KKR managed funds and IMM consortium for a total of 3.08 trillion Korean won equity investment in SK Horizon. As investors in the newly established company, KKR and IMM consortium will provide funding to support SK Horizon’s expansion as an AI data center infrastructure platform. After the completion of the transaction, KKR and IMM consortium will respectively hold 29% and 20% of SK Horizon’s shares, while SKT will maintain the largest shareholder and management control with 51% of the shares.

KKR is one of the world’s most active infrastructure investors, managing over $100 billion in infrastructure assets, of which over $70 billion is invested in digital and power assets. KKR mainly made this investment through its Asia Pacific infrastructure strategy.

The IMM consortium is composed of leading South Korean investment institutions IMM Investment and Stonebridge Capital. IMM Investment was founded in 1999 and is a leading alternative investment institution in South Korea, managing assets exceeding $7.5 billion. Stonebridge Capital was founded in 2008 and has accumulated assets under management of approximately KRW 3.6 trillion.

SKT completes AIDC expansion architecture layout

Through this governance restructuring, SKT, SK Horizon, and SK Hyper, established in July last year, have jointly completed the AIDC business architecture layout. SKT will coordinate the overall AIDC business of the group, formulate strategic directions, and collaborate with global technology giants. SK Horizon is responsible for expanding existing infrastructure such as AIDC and submarine cables. SK Hyper focuses on the development of new AIDC projects, with the goal of opening up 5GW capacity in stages by 2029 and gradually expanding to a total capacity of 15GW by 2035.

SK Broadband, the surviving company, plans to drive innovation through its products and services AX, strengthening its competitiveness in fixed line, media, and enterprise businesses.

SK Broadband CEO Kim Sung soo said, “This governance restructuring aims to enhance AIDC’s business expertise and accelerate execution. As an AIDC infrastructure company, we will continue to expand SK Horizon to become a leading data center operator in South Korea. ”

KKR partner Keith Kim said, “SK Horizon brings together mature operational platforms, under construction capacity, and strong strategic partners. The advanced digital ecosystem and growing demand for AI capacity in South Korea provide a solid foundation for SK Horizon’s next phase of growth. ”

IMM Investment’s infrastructure manager, Kim Byung hoon, stated that “AI data centers and submarine cables will become the core infrastructure assets shaping South Korea’s digital sovereignty and industrial competitiveness. The IMM consortium aims to build a sustainable growth structure by combining the capital strength of global partners with the stability of domestic capital.”