By Kim Yoo-chul
Samsung SDS, the information solutions unit of Samsung Group, said Thursday that it will push for its stocks to be listed on the Korea Exchange (KRX) this year.
The move is aimed at securing funds for the firm’s global expansion, the company said.
"We are seeking an initial public offering (IPO) this year because we need more cash to expand our business areas and to find opportunities for acquisition for external corporate growth," Yoon Sang-woo, head of SDS' communications team, told reporters.
Officials at KRX said the firm may go public sometime in the latter half of this year.
"We know SDS will pick lead managers for the IPO this month to decide on the volume of the share-offering. The IPO is going to take off late this year," said one KRX official.
In a statement, SDS said the IPO plan will help it acquire patents in some lucrative business fields that it has identified with cloud computing, big data, and Internet of Things being included.
"Based on relative patents, SDS is eyeing … healthcare-, retail- and hospitality-related services and solutions," the statement reads.
The total value of SDS stocks is estimated to rise above 15 trillion won, beating LG Electronics to become the nation's 13th-largest company by asset values, said stock market analysts.
"Share of SDS had been traded with 150,000 won in the off-market. SDS issued a total of 77.38 million shares. We can say proper value of SDS stock would be around 200,000 won. The IPO makes sense considering increased investor demand for the firm," said a senior manager at a Europe-based hedge fund in Seoul by telephone.
Due to Samsung's convoluted ownership structure, Samsung officials say the IPO will help Samsung Electronics Vice Chairman Lee Jay-yong take over the conglomerate's electronics-related business units as Lee could earn more than 1.3 trillion won from the IPO.
Lee is a major shareholder of SDS with an 11.25-percent stake.
Through a cobweb-like shareholding structure, Samsung Chairman Lee Kun-hee and his three children have control over roughly 80 Samsung affiliate companies. But the family is in the process of splitting the ownership into three big parts.
Samsung's Lee family is co-sharing stakes of Samsung SDS and Samsung Everland. For SDS, Samsung Chairman Lee Kun-hee owns 0.01 percent and oldest daughter Lee Boo-jin and the youngest daughter Lee Seo-hyun own 3.9 percent, each.
"Samsung Electronics is the biggest shareholder of SDS by owning 22.58 percent SDS shares. A previous decision to acquire Samsung SNS had actually been intended to speed up power succession to the third generation. The Lee family found ways to prepare for 'inheritance tax,'" said another Samsung official.
The total wealth of Samsung Chairman Lee was estimated at some 12 trillion won, including 10.80 trillion won in listed stocks.
As Korea asks to pay 50 percent in inheritance tax, the Samsung siblings would pay at least 5 trillion won in taxes alone.