NTT DoCoMo sells $370 mn KT shares to Shinhan Bank

Japan's mobile phone operator NTT DoCoMo has sold all its shares in KT Corp., worth 437.5 billion won ($370 million), to Shinhan Bank which formed a strategic alliance with the South Korean telecom operator on Monday, according to people with knowledge of the matter.

The stake sale took place after NTT, Japan's leading telecom company, decided to unload its shares in KT as part of its restructuring measures, including absorbing the mobile phone company DoCoMo last year and selling overseas assets.

DoCoMo was the second-largest shareholder with a 5.46% stake in KT.

Tipped off about the stake sale plan, KT Chief Executive Ku Hyeon-mo rushed to find a new strategic investor and finally reached a broad-based and long-term strategic alliance with Shinhan, involving a $370 million cross-sharholding agreement, the sources said. 

Unlisted Shinhan Bank took over DoCoMo's shares in KT directly, relieving stock overhang concerns for KT, short for Korean Telecom.

The news sent KT shares to a three-week high of 31,850 won at one point on Tuesday, against a 1% drop in the broader Kospi market.

Hana Financial Investment analyst Kim Hong-shik said that DoCoMo's disposal of KT shares would attract additional foreign funds into the telecom service provider, since its foreign ownership is capped at 49% under the current law.

"This stock transaction increased room for foreign investors to buy KT shares, raising its chances of being included in the MSCI index," he said.

Write to Han-Gyeol Seon and Dae-Hun Kim at always@hankyung.com
Yeonhee Kim edited this article.