SEOUL, KOREA - POSCO will dispose of all its stake in SK Telecom it has held since 2000. The steel maker played the role of a "white knight" by acquiring a 6.5-percent stake when the mobile telecom service operator was in danger of being swallowed up by Sovereign Capital Partners, an international private equity fund firm. POSCO decided to sell off the stake as part of an effort to improve its financial standing, but it will have to incur losses as the current SK Telecom share price is below that of 14 years ago.

 

During the second quarter, POSCO had sold 1,190,000 SK Telecom shares (1.95%). It announced that it would sell off the remaining 0.7-percent stake within the end of this year. It has been almost 14 years since the steel company purchased the telecom company's shares in April 2000 at the per-share price of 285,000 won.

 

As the steel market conditions deteriorated, POSCO began selling SK Telecom shares in 2012. In April 2012, it sold 2.34 million shares at the price of 139,500 won. It then followed up with another sale of 570,000 shares at 223,000 won.

 

The two companies have held each other's shares as a way to protect the other's management control. SK Telecom will also dispose of all POSCO shareholdings soon. Earlier in October 2012, SK Telecom sold a 1.42-percent stake in POSCO, with the remaining shares of 1.24 million (1.4%).