World's Largest Proxy Advisory Firm Supports Daelim Industrial's Corporate Split

Daelim Group to Consolidate and Relocate Headquarters Ahead of Holding Company System Launch Next Year

Daelim Industrial Seoul Jongno-gu Susong-dong Office Building

[Asia Economy Reporter Onyu Lim] ISS (Institutional Shareholder Services), the world's largest proxy advisory firm, has supported Daelim Industrial's corporate split.

According to the construction industry on the 24th, ISS recommended approval of all agenda items, including the split plan and the appointment of internal and external directors, in its report on Daelim Industrial's extraordinary general meeting agenda. ISS also evaluated the strategic rationale behind Daelim Industrial's proposed split as reasonable and forecasted that the company's value, which has been undervalued, will be reassessed through the transition to a holding company.

Earlier, in September, Daelim Industrial resolved to split the company into a holding company (DL), construction (DL E&C), and petrochemicals (DL Chemical) through a physical and material division. Daelim Industrial explained that this was "to pursue individual growth strategies tailored to each industry’s characteristics and to enhance shareholder value and maximize shareholder profits through corporate value reassessment."

While some in the market view this split as a move to expand and strengthen Chairman Lee Hae-wook's management rights, ISS's supportive stance has increased the likelihood that Daelim Industrial's corporate split will pass as originally planned.

This is because a significant number of foreign investors are expected to follow ISS's recommendations. Opinions from proxy advisory firms like ISS greatly influence the voting behavior of institutional investors such as pension funds and foreign investors. Many foreign investors decide their votes based on the recommendations of proxy advisory firms. Foreign investors hold 36.5% of Daelim Industrial's shares.

Daelim Industrial plans to hold an extraordinary general meeting on the 4th of next month to discuss the corporate split agenda. If the agenda passes as planned, the physical and material split will be completed, and the holding company system will be launched on January 1 of next year.

Meanwhile, Daelim Group will consolidate and relocate its headquarters to 'D Tower Donuimun' (currently Centerpoint Donuimun) in Pyeong-dong, Jongno-gu, Seoul, in line with the launch of the holding company system next year. The group plans to move out of its current offices in Susong-dong, Jongno-gu, the nearby D Tower, and the Namdaemun Korea Chamber of Commerce and Industry by the end of next month and move into the new headquarters. Additionally, about 3,000 employees from Daelim Group affiliates, including Daelim Corporation, Daelim P&P, and Daelim Energy, will relocate to the new headquarters.

The new headquarters, completed this year, has 7 basement floors and 26 above-ground floors, with a total floor area of 86,268 square meters. Daelim is leasing the building while holding some equity investment.

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