Appropriate Valuation for Overpriced Stock Payment... Government Prepares Measures to Activate Sales

[Sejong=Asia Economy Reporter Moon Chaeseok] The government has devised a plan to evaluate overvalued stocks paid in kind at market-appropriate prices.

The Ministry of Economy and Finance announced on the 23rd that it held the Securities Subcommittee of the State Property Policy Deliberation Committee and approved the "Plan to Revitalize the Sale of Stocks Paid in Kind."

Stocks paid in kind refer to shares received instead of cash payment when it is difficult to pay inheritance tax in cash. These are unlisted stocks with limited liquidity, and the government's average stake is low at 13%, which has been pointed out as a problem due to weak investment incentives. As a result, sales performance has been poor, and the holding period tends to increase.

Accordingly, the government has prepared measures to evaluate the value of stocks paid in kind at market-appropriate price levels.

First, it was decided to adjust the discount rate (capitalization rate) used to calculate the earnings value of high-quality stocks paid in kind that meet the profitability requirements for KOSDAQ listing to a level comparable to market evaluation.

Additionally, for long-held stocks paid in kind from companies that are difficult to sell (stagnant companies), the maximum discount rate on the planned sale price during competitive bidding will be expanded from the current 20% to 40%.

If the valuation amount of stocks paid in kind under the State Property Act is excessively high, an appropriate value will be calculated by commissioning an external accounting firm.

To diversify demand, a plan was also devised to provide incentives to encourage issuing companies, the main demanders of stocks paid in kind, to repurchase their own shares.

An investment briefing session for major stocks paid in kind companies will be held to activate the investment-type sale system that sells stocks paid in kind to investment institutions, and to expand purchase opportunities for small investors, the target for installment payment of sale proceeds will be relaxed from the current 1 billion KRW to around 500 million KRW.

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