Dongwon Industries Ends Exercise of Stock Purchase Rights... Worth 44.3 Billion KRW

Dongwon Industries CI. / Photo by Dongwon Industries

[Asia Economy Reporter Song Seung-yoon] Dongwon Industries announced on the 5th that it has closed the reception of stock purchase claims ahead of its merger with Dongwon Enterprises.

From the 14th of last month to the 4th of this month, Dongwon Industries shareholders exercised their stock purchase rights for a total of 214,694 shares, amounting to 44.3 billion KRW. Dongwon Industries had included a clause stating that if the total amount of stock purchase claims combined with Dongwon Enterprises exceeds 70 billion KRW, the merger agreement could be canceled. Since the threshold for merger cancellation was not exceeded, the merger will proceed as planned, with the merger date set for the 1st of next month and the new shares trading to begin on the 16th of the same month, thereby finalizing the merger process.

Dongwon Industries plans to pay the purchase price to shareholders who exercised their stock purchase rights on the 28th of this month. The price offered by Dongwon Industries for the stock purchase rights is 238,186 KRW per share.

Since announcing the merger between Dongwon Industries and Dongwon Enterprises in April of this year, Dongwon Group faced controversy regarding the merger ratio. In response to shareholders' demands, they recalculated the merger ratio based on asset value instead of the standard market price. Separately, they are also pursuing a stock split at a ratio of approximately one-fifth.

A company official stated, "The amount claimed appears to be lower than initially expected, reflecting shareholders' expectations for synergies in business and financial areas after the merger," adding, "We will complete the remaining merger procedures based on shareholders' trust and execute the planned growth roadmap."

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