South Korea's to kick off new holding firm

South Korea's third-largest conglomerate SK Group said Friday its new holding firm will officially kick off this weekend as part of efforts to streamline its governance structure and solidify the owner's control.

The new entity, formed through a merger between information technology service provider SK C&C Co. and SK Holdings Ltd., will set sail on Saturday, and have assets of 13.2 trillion won (US$11.2 billion) and a 4,100 workforce. The merger was approved by shareholders in June.

Although the share swap ratio between SK Holdings and SK C&C was set at 0.737 to 1, the new entity will still be named SK Holdings Corp.

The group said the new holding company will operate under a "one-company, two-systems" policy and two CEOs, who will each be in charge of a business division.

Industry watchers said the move apparently comes as SK Group is moving to reorganize its business structure so that SK C&C stands at the top of group management through its stake in ex-SK Holdings.

Group chief Chey Tae-won was able to control the group by holding a 32.9 percent stake in SK C&C, as the firm in turn owns 31.8 percent of ex-SK Holdings. Chey's stake in ex-SK Holdings stood at only 0.02 percent. Chey and related parties will hold more than a 30 percent stake in the new SK Holdings.