SK seeks to sell 13.3% stake in Chinese food firm Joyvio
Ik-Hwan Kim
May 20, 2024 (Gmt+09:00)
SK Inc., the holding company of South Korea’s second-largest business group SK, is in talks with Joyvio Group to sell its entire 13.3% stake in China’s top fresh produce company five years after its investment, said sources on Sunday.
The exit is part of SK Group's investment holding company’s ongoing portfolio restructuring efforts to unload non-core assets, ranging from car rental and small appliance businesses to the alternative food business.
“SK is mulling exercising its put option contract signed with Joyvio when it purchased a 13.3% stake,” said a source from the investment banking industry on Sunday. “It is in talks with Joyvio shareholders to exercise the put option.”
An official from SK who declined to be named also said, “We are seeking to sell (our) stake in Joyvio but nothing has been confirmed.”
A put option is a contract that gives its holder the right to sell a set number of equity shares at a set price, called the strike price, before a certain expiration date.
Joyvio is a fresh produce company established by Chinese conglomerate Legend Holdings Corp. in 2012. It distributes fruit, seafood and alcoholic beverage products and provides catering services to organizations in China.
It owns foreign food companies overseas such as Australian seafood firm KB Seafood Co. and imports seafood from those countries to sell them in China.
The Joyvio stake sale is deemed part of the SK investment arm’s portfolio rebalancing process to focus on more lucrative, promising businesses, said industry observers.
GROUPWIDE PORTFOLIO REBALANCING
In 2023, Joyvio reported a net loss of 33.9 billion won on sales of 3.9 trillion won. SK’s equity stake in Joyvio was valued at 196 billion won, lower than its purchase price, as of end-2023.
Joyvio is one of the assets SK is seeking to divest as part of its efforts to restructure non-core assets under the direction of Chey Chang-won, the chairman of SK SUPEX Council, SK Group’s top advisory body setting strategic direction and providing guidance on essential business issues.
Earlier this month, it also signed a contract with Kyung Dong Navien Co., a Korean boiler maker, to carve out and sell the gas stove, microwave and oven businesses from its wholly-owned home appliance unit SK Magic to improve the latter’s financial health.