Hyundai Department Store Group Reviews Sale of HCN 'Cable TV Business'

[Asia Economy Reporter Seungjin Lee] Hyundai Department Store Group is considering the sale of Hyundai HCN’s ‘Broadcasting (SO) and Telecommunications Business Division’ through a physical division.

In response to the restructuring movement in the domestic paid broadcasting market, instead of selling the cable TV (SO) business, the group plans to pursue new businesses with high future growth potential or mergers and acquisitions (M&A) to enhance Hyundai HCN’s corporate value and shareholder value.

Hyundai HCN, a comprehensive cable broadcasting operator under Hyundai Department Store Group, announced on the 30th that it will split the broadcasting and telecommunications business division into ‘Hyundai Futurenet (the surviving company)’ and ‘Hyundai HCN (the newly established company).’

Hyundai Futurenet will hold 100% of the shares of the newly established company through a simple physical division method. Hyundai Futurenet will remain a listed company, and the newly established subsidiary Hyundai HCN, which will use the existing trade name, will become an unlisted company. The division date is set for November 1.

Simultaneously with the physical division, Hyundai HCN will begin reviewing various structural improvement plans, including the sale of shares in the newly established subsidiary Hyundai HCN and Hyundai Media Co., Ltd., a 100% subsidiary of Hyundai Futurenet. If the share sale proceeds, it plans to conduct it through a competitive bidding process next month.

However, the company stated that even if the sale process begins, if the sale is disallowed or delayed due to government approval issues during the process, or if the sale conditions are judged not to align with shareholder value, the sale will be withdrawn. In that case, the company plans to enhance the competitiveness of the cable TV business through external investment attraction, business partnerships, and technological cooperation on its own.

A Hyundai Department Store Group official explained that the division and sale review of the broadcasting and telecommunications business division is intended to quickly respond to the restructuring of the domestic paid broadcasting market and simultaneously enhance stable growth and corporate and shareholder value through entry into new businesses with high future growth potential.

The official said, “Hyundai HCN’s cable TV business has secured business rights (SO, 8 areas) mainly in major cities such as Seoul, Busan, and Daegu, and recorded about 70 billion KRW in EBITDA last year, showing the highest level of cash-generating ability among cable TV operators. However, considering the recent rapid restructuring of the market centered on telecommunications operators, we decided to review the division and sale of the broadcasting and telecommunications business division.”

The official added, “If the share sale is successful, we plan to use the existing cash held by Hyundai HCN plus the proceeds from the cable TV business sale to pursue new businesses with high growth potential or large-scale M&A in the future.”

After the division of the broadcasting and telecommunications business division, Hyundai Futurenet, the surviving company, plans to reorganize its business focusing on ‘Digital Signage’ and ‘Enterprise Messaging Service’ and expand its business areas into fields with high future growth potential through M&A.

Hyundai Futurenet will first reorganize its business structure to operate focusing on ‘Digital Signage’ and ‘Enterprise Messaging Service,’ excluding the existing broadcasting and telecommunications business division.

‘Digital Signage’ refers to a digital new technology media service that installs display screens in public places or commercial spaces to provide content such as information, entertainment, and advertising. ‘Enterprise Messaging Service’ is a bulk SMS agency service for notifications and advertisements sent by companies to customers. Both businesses are considered promising with high growth potential, as the overall market size shows double-digit growth annually.

Hyundai Futurenet’s strategy for the ‘Digital Signage’ business is to expand the business targeting large shopping malls, hotels, hospitals, and public institutions. For the ‘Enterprise Messaging Service’ business, it plans to fully utilize the B2B sales channels accumulated through the existing cable TV business to expand the target market to hospitals, hotels, public institutions, and more.

Additionally, Hyundai Futurenet plans to expand its business areas into fields with high growth potential or those capable of creating synergy with the group’s business portfolio, such as distribution, fashion, living, and interior. To this end, it intends to actively pursue new businesses or large-scale M&A that align with the group’s future growth strategy by utilizing the cash on hand and additional proceeds from the share sale if successful. Hyundai HCN is known to currently hold nearly 400 billion KRW in cash.

A Hyundai Department Store Group official said, “The review of the division and sale of the broadcasting and telecommunications business division is an inevitable choice to quickly respond to the rapidly changing domestic paid broadcasting market structure.” He added, “Hyundai Futurenet, the surviving company, will move away from the past cable TV-centered business portfolio and actively enhance corporate and shareholder value by discovering new growth engines through pursuing new businesses or M&A with high future growth potential.”

This content was produced with the assistance of AI translation services.