[Weekly HOT Stocks] Ssangyong Cement, 2 Major Disclosures... Expectations for Strengthened Shareholder Returns

Announcement on January 1 Regarding Common Stock Free Capital Reduction, Preferred Stock Paid-in Cancellation, and Delisting 추진 내용

[Asia Economy Reporter Kum Boryeong] Ssangyong Cement attracted investors' attention by issuing two major disclosures within a week. In particular, market analysis suggests that the recent disclosures have created conditions for strengthening shareholder returns.

According to the Financial Supervisory Service's electronic disclosure system (DART), Ssangyong Cement announced before the market opened on the 1st that it would carry out a free reduction of common stock, a paid cancellation of preferred stock, and pursue delisting.

Due to the decision to reduce the common stock free of charge, the par value decreased from the previous 1,000 KRW per share to 100 KRW. Ki-ryong Kim, a researcher at Yuanta Securities, explained, "The capital account replacement effect is expected to be reflected, where the capital reduction of approximately 455 billion KRW will be added to capital surplus," adding, "The number of common shares held by existing shareholders remains unchanged."

Along with this, Ssangyong Cement also announced plans to pursue paid cancellation and delisting of preferred stock. Through a disclosure on May 29, it announced a public tender offer to buy all preferred shares at 15,500 KRW per share during the period from June 1 to 30, resulting in the acquisition of approximately 80.3% of the preferred stock.

Researcher Kim analyzed, "The current shareholding ratio does not meet the voluntary delisting requirement (95%), but it satisfies the special resolution requirement of the shareholders' meeting. Upon approval at the shareholders' meeting (October 12), November 16 will be set as the cancellation record date (trading suspension expected from November 12), and preferred shareholders will receive 9,297 KRW per share from the company," adding, "The major shareholder plans to secure the remaining shares by setting the purchase bid price at 15,500 KRW (subject to change) within the Korean Exchange rules from November 1 to November 11 to protect the interests of preferred shareholders."

Although these disclosures do not represent changes in the company's fundamentals, the increase in distributable profits under accounting and commercial law is expected to strengthen Ssangyong Cement's shareholder return policy. Moonjun Jang, a researcher at KB Securities, stated, "Amounts exceeding 1.5 times the capital under commercial law can be converted into retained earnings. Due to the capital reduction (505.4 billion KRW → 50.4 billion KRW), capital surplus exceeding 75.8 billion KRW can be converted into retained earnings through the shareholders' meeting," adding, "While an increase in retained earnings and distributable profits does not necessarily mean an increase in dividends, for Ssangyong Cement, which has been paying dividends larger than net income, the increase in retained earnings and distributable profits will provide a meaningful foundation to continue an active shareholder return policy."

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