NextenBio, Aggressive Investment Following Lee Jeong-chan's Sole CEO System

After Acquiring LoL Korea for 13.4 Billion Won, Real Estate Worth 76 Billion Won Acquired Within a Month
Funds Raised Through Real Estate Trust Contract
Core Business Sales Slow to Recover... Need for Business Diversification

[Asia Economy Reporter Hyungsoo Park] Since Nexen BioScience transitioned to a sole CEO system under Lee Jeong-chan in March, it has been investing in various ways to improve profitability.

According to the Financial Supervisory Service's electronic disclosure system on the 2nd, Nexen BioScience will acquire ‘First Village,’ a large-scale complex outlet shopping mall spanning 24,000 pyeong in Asan, Chungnam, for 76 billion KRW.

A Nexen BioScience official explained, "We will secure stable annual rental income worth several billion KRW by signing a lease contract with an experienced entrusted operator."

First Village is a large-scale themed outlet covering approximately 78,164 m² located in Asan, Chungcheongnam-do, which opened in November 2011. About 190 diverse domestic and international brands are housed there. It has good accessibility due to its proximity to Cheonan-Asan Station, Gyeongbu Expressway, and Seohaean Expressway. First Village achieved profitable management even in 2020 and 2021, when the business environment was unfavorable due to COVID-19.

To acquire First Village, Nexen BioScience signed a real estate trust contract using Asan First Village as collateral. Of the acquisition price of 76 billion KRW, 64 billion KRW will be borrowed. The interest rate is between 4% and 6%, with approximately 3 billion KRW paid annually as interest. While signing a lease contract with the entrusted operator can increase stability, the rental income scale may decrease after deducting interest.

External appraisal agencies valued First Village at 56.1 billion KRW for the land and 40.9 billion KRW for the buildings. The land was calculated at 718,000 KRW per square meter, considering nearby transaction prices.

Earlier, Nexen BioScience decided on March 13 to acquire a 79% stake in Roll Korea for 13.43 billion KRW. The transaction will be completed upon payment of the remaining 5.4 billion KRW on April 1. Established in 1998, Roll Korea manufactures industrial equipment and steel plates. Last year, it recorded sales of 26.2 billion KRW and a net profit of 900 million KRW. The acquisition was decided based on its high financial soundness, industrial safety, and profitability.

Nexen BioScience, a CNC automatic lathe company, recorded sales of 3.3 billion KRW and an operating loss of 1 billion KRW in the first quarter of this year. Sales trends show 32.4 billion KRW in 2019, 9.7 billion KRW in 2020, and 17 billion KRW in 2021. It has not yet recovered to the 2019 level.

With the growing need for business diversification and profitability improvement, Nexen BioScience’s bio business head Song Myeong-seok resigned in March for personal reasons. Lee Jeong-chan, who oversaw the machine tool business division, is leading Nexen BioScience alone. Bae Jun-oh, CEO of Studio Santa Claus Entertainment, the largest shareholder of Nexen BioScience, also joined as an inside director to provide management advice.

Nexen BioScience now owns four subsidiaries: ▲Nexen BioScience, which holds Rosvivo Therapeutics developing diabetes treatments, ▲Fortress Investment, a specialized investment firm, ▲EV Advanced Materials, engaged in electric vehicle battery-related business, and others. The company has established a strategy to enhance corporate value through securing investment returns and strategic investments in core industries.

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