NEW YORK-Korea Telecom Corp., South Korea’s largest fixed-line telecommunications operator and second-largest mobile wireless carrier, raised $2.24 billion in American depository receipts sold June 28 to investors outside the country.
The offering was part of the South Korean government’s commitment to privatize many state-run companies as a condition of the $58.35 billion bailout the International Monetary Fund arranged in late 1997. Proceeds of the deal, which Morgan Stanley Dean Witter lead-managed, will go to the South Korean equivalent of the Treasury.
The sale of 111 million ADRs, the equivalent of 55.5 million common stock shares, reduced the government’s ownership in Korea Telecom to 40.1 percent from 57.9 percent.
In conjunction with the sale, the federal Information and Communication Ministry said it planned to complete the privatization of the telecommunications company within one year, as scheduled, by selling an additional 15 percent interest to foreign strategic investors and 27 percent to local investors. Microsoft Corp., Motorola Inc. and Qualcomm Inc. already own minority stakes in the company.
Korea Telecom raised $2.49 billion in 1999 from an issue of ADRs priced at $27.56 each. In the most recent sale, each ADR fetched $20.20. The securities are traded on the London and New York stock exchanges.
The telecommunications operator, headquartered in Kyunggi-do, earned a net profit of $261.1 million during the first quarter of this year.
