Ssangyong Information & Communications, 25 Billion Won Paid-in Capital Increase After Debt Conversion to Resolve 'Partial Capital Impairment'

[Asia Economy Reporter Lim Jeong-su] Ssangyong Information & Communications, acquired last year by ITCEN Group, will resolve some capital erosion through a free capital reduction and expand its cloud business, which it has positioned as a new growth engine, by conducting a paid-in capital increase worth 25 billion KRW.

Ssangyong Information & Communications announced on the 24th that it decided to implement a 2:1 free capital reduction, a 1:2 stock split, and a paid-in capital increase worth 25 billion KRW. The free capital reduction is intended to resolve some capital erosion caused by lawsuits in February. By conducting a free capital reduction, the capital stock is converted into capital surplus, which can resolve capital erosion.

At the same time, to maintain the stock price and the number of shares as before the capital reduction, a stock split was carried out to lower the par value from the existing 1,000 KRW to 500 KRW. Additionally, the funds raised through the paid-in capital increase will be used to improve the financial structure and invest in new cloud business ventures.

The cloud business is considered a future growth engine that Ssangyong Information & Communications is actively pursuing. In January, Ssangyong Information & Communications passed the managed service provider evaluation under the "Digital Service Specialized Contract System" hosted by the Ministry of Science and ICT.

In March, it is expected to pass the IaaS provider evaluations of Naver Cloud and KT Cloud. Accordingly, it has secured a favorable position in the competition for the public institution cloud sector, which will officially open this year.

A representative of Ssangyong Information & Communications said, "To minimize shareholder damage caused by the capital reduction, we immediately conducted a stock split," and added, "The funds secured through the paid-in capital increase will be intensively invested in the cloud business to serve as a new growth engine."

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