South Korea’s SK Group plans to separate e-commerce platform 11st.com from SK Planet Co. and then recapitalize the company to give it a push in the e-biz race with retail giants like Lotte and Shinsegae.

According to investment banking sources on Monday, SK Planet will soon present to the board a plan to spin off 11st.com and merge its remaining operations with ICT-focused SK Techx.

After the spinoff, 11st.com will issue preferred shares to the National Pension Fund and private equity fund H&Q Korea. The NPS approved investment of 400 billion won ($362.3 million) in the new business.

SK Planet plans to use the capital to add artificial intelligence technologies and advanced payment services to differentiate the online shopping mall.

SK Planet was originally groomed to be an e-commerce specialist, holding not only 11st.com but also mobile wallet service Syrup and point mileage service OK Cashbag under its wing. But the company’s flagging performance in recent years prompted management to take action. With the reorganization, 11st.com would stand alone as an e-commerce platform and other business units in SK Planet will be merged with SK Techx to be rationalized under SK Telecom, SK C&C and other ICT-related affiliates.

11st.com had previously engaged in talks with a Chinese private equity fund to seek 1.3 trillion won in financing but the talks fell through amid the diplomatic row with China over a missile shield. The alternative idea of creating a united e-platform by merging 11st.com with the online shopping malls of Shinsegae and Lotte also flopped due to conflicts over the stake sale.

By Lee Han-na and Kim Hyo-jin

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