April 20, 2024

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South Korea’s trading company SK Networks said Sept. 24 its board has agreed to hand over the car rental operation to its affiliate AJ Rent a Car in exchange for 21.99 percent shares worth 162.5 billion won ($136 million).

The transaction, meant to consolidate the firm’s car rental business under AJ Rent A Car, is poised to take place on Dec. 31, involving SK’s car rental-related assets, workforce and wholly owned subsidiary SK Rent-a-Car Service, except for one shop for long-term car lease.

As a result, SK Networks’ stake in AJ Rent a Car will jump to 64.23 percent.

Courtesy of SK Networks

“The consolidation of rent-a-car operations will strengthen its competitive edge and creating synergies, and as a result, a steady market growth is expected,” SK Networks said.

This came nine months after SK Networks, operating the second-largest car rental business in Korea, acquired a 42.24 percent stake in third-largest AJ Rent A Car for 295.8 billion won in January, in an apparent move to narrow the gap between SK Networks and leader Lotte Rental. Lotte Rental merged with Kumho Rent-a-Car to increase market clout in June 2015.

SK Networks has yet to decide whether to change the name of AJ Rent a Car, according to a media representative.

Some 10 percent of SK Networks’ revenue came from its rental car business -- comprising 114,000 vehicles and 17 sales branches -- in the first half this year.

Other than car rental business, SK Networks focuses on international trading, mobile device sales, hospitality and water purifier rental services. SK Holdings is its largest shareholder with a 39.14 stake.

By Son Ji-hyoung (consnow@heraldcorp.com)