Approval of Hyundai HCN's Physical Division... 65.8 Billion Won Content Investment Condition

[Asia Economy Reporter Koo Chae-eun] Hyundai HCN has received approval from authorities for the 'physical division' condition required for its sale. This includes an investment of 65.8 billion KRW in the media content sector.

Accordingly, the signing of the main contract with KT Skylife, which was selected as the preferred bidder in August, and the application for corporate merger approval with the Fair Trade Commission are expected to gain momentum in the full-scale merger and acquisition process.

On the 25th, the Ministry of Science and ICT decided to grant approval for Hyundai HCN's corporate division change and the change of the largest shareholder with conditions imposed.

Previously, Hyundai HCN announced that it would physically split Hyundai HCN, which handles the cable TV broadcasting business, into a newly established corporation for the broadcasting business to be sold, and separate other businesses into 'Hyundai Futurenet' as the surviving corporation, then requested approval from the Ministry of Science and ICT for the change of the largest shareholder.

The Ministry of Science and ICT formed a review committee of five experts and conducted a 3-day review from August 12 to 14, ultimately judging the application as 'qualified.'

Conditions were imposed requiring employment succession at the newly established Hyundai HCN created by the physical division, maintenance of contracts with partner companies, and investment in the media content sector. To protect cable TV subscribers of Hyundai HCN before the division, the new corporation must succeed existing subscribers and guarantee usage conditions.

The surviving corporation, Hyundai Futurenet, must fulfill an investment of 65.8 billion KRW in the media content sector as a condition of the physical division. The Ministry of Science and ICT stipulated that if the investment is not fulfilled, the approval may be revoked.

Since Hyundai HCN has received approval for the physical division from the Ministry of Science and ICT, it plans to promptly proceed with signing the main contract with KT Skylife, which was selected as the preferred bidder last month. Even if the largest shareholder changes due to future mergers and acquisitions, the surviving corporation Hyundai Futurenet must continue to fulfill investments in the media content sector until 2024 by submitting a memorandum of understanding and investment guarantee measures.