THE KOREA ECONOMIC DAILY, GLOBAL EDITION

South Korea’s second-largest conglomerate SK Group is seeking to divest SK Signet Inc., four years after acquiring the EV charger manufacturing business, as part of its sweeping portfolio rebalancing strategy that prioritizes pragmatism over sunk costs.

SK has been in private discussions with local private equity funds to gauge interest in the asset, people familiar with the matter said on Wednesday.

The proposed sale would involve 62.9% stake in the company owned by SK Group’s investment holding firm SK Inc., with a transaction value expected to be around 300 billion won ($212 million), sources said.

SK Signet, listed on Korea’s Konex market, is a leading player in the global ultra-fast EV charger segment, holding the top spot in the US. It ranks second globally.

Originally known as Signet EV, SK acquired the company in 2021 for 293 billion won, when the group purchased a 55.5% stake.

The latest move, if concluded, would see SK exit the business within four years, underscoring its willingness to shed non-core assets even at a loss, sources said.

The move comes as SK Signet grapples with a string of operational challenges, exacerbated by the slowdown in the global EV sector, known as the EV chasm.

Persistent issues with power module quality have also led to SK Signet’s higher warranty provisions, cancelled orders and rising maintenance costs.

Last year, the company posted 83.8 billion won in revenue, but suffered an operating loss of 242.8 billion won and a net loss of 244.1 billion won.

CUTTING LOSSES TO FOCUS ON CORE GROWTH ENGINES

In the US, SK Signet accounts for about half the ultra-fast chargers sold by Electrify America (EA), competing with industry leader Tesla Inc.’s Supercharger.

SK Group’s decision to push ahead with the sale reflects its intensifying focus on financial discipline and operational pragmatism, analysts said.

The group recently injected an additional 115 billion won into SK Signet via a third-party share placement, bringing its total investment in the company to over 400 billion won.

SK Signet’s market capitalization, however, stands at just 87.5 billion won, leaving the value of SK Group’s stake holding at about 55 billion won.

“This is a textbook case of SK’s pragmatic rebalancing in action,” said a Seoul-based investment banker. “They are clearly signaling that they won’t cling to underperforming assets, even if it means losses.”

The decision also mirrors SK’s recent move to sell its semiconductor wafer subsidiary SK Siltron Co.

REDRAWING SK’S EV VALUE CHAIN MAP

Analysts said the move to sell SK Signet underscores a broader realignment of SK Group’s electric vehicle and battery value chain strategy.

Over the past several years, SK Group has sought to build a vertically integrated ecosystem, anchored by SK On Co.’s battery business and supplemented by units such as SK Nexilis Co., which produces copper foil, and SK Signet in charging infrastructure.

However, group insiders said synergies among these businesses have been limited.

The EV charging sector, in particular, has become increasingly commoditized, triggering SK Group to streamline its holdings and concentrate resources on higher-margin businesses.

“SK is moving away from its previous all-in approach in EVs and batteries,” said an industry analyst. “They are now being more selective, divesting parts of the value chain that don’t deliver enough strategic or financial upside.”

SK Group is also proceeding with the sale of Renewus Co. and Renewone Co., two waste treatment affiliates acquired by SK Ecoplant Co. in 2020, as it accelerates the clean-up of its sprawling portfolio.

Market watchers said that while SK’s frequent reversal of M&A decisions could be read as a sign of strategic inconsistency, its bold moves to divest unprofitable businesses represent the conglomerate’s agility and flexibility in the face of fast-evolving industry dynamics.

Write to Jong-Kwan Park and Jun-ho Cha at pjk@hankyung.com
In-Soo Nam edited this article.