GlobalSea Group Completes Acquisition Process of Ssangyong Construction

Temporary General Meeting of Shareholders on the 29th... Becoming the Largest Shareholder
Paid-in Capital Increase of 150 Billion Won Scheduled for January

Global Seara Group Headquarters Building Exterior View

[Asia Economy Reporter Onyu Lim] The acquisition process of Ssangyong Construction by the Global Sea Group has been completed.

On the morning of the 29th, Ssangyong Construction held an extraordinary general meeting of shareholders and approved the appointment of directors proposed by Global Sea Group as the largest shareholder. In October, Global Sea Group signed a share purchase agreement (SPA) with Dubai Investment Corporation (ICD), the largest shareholder of Ssangyong Construction, and after going through the Fair Trade Commission's review and approval process, completed the payment of the remaining acquisition amount, thus finalizing the acquisition process. As a result, Global Sea Group has become the new largest shareholder of Ssangyong Construction.

Subsequently, Global Sea Group will proceed with a paid-in capital increase in January next year to improve Ssangyong Construction's financial environment and actively support its business activities. The paid-in capital increase will amount to 150 billion KRW. Upon completion of the capital increase, Global Sea Group will hold approximately 90% of Ssangyong Construction's shares.

Global Sea Group pursued the acquisition of Ssangyong Construction as one of the methods to achieve its 'Vision 2025' goal of developing into a group with sales of 10 trillion KRW and operating profit of 1 trillion KRW by 2025, focusing on textiles and fashion, construction, paper and packaging, F&B (food and beverage), and culture and arts sectors.

With Global Sea Group acquiring Ssangyong Construction, not only is synergy expected among affiliated companies, but the group's global capabilities are also anticipated to be significantly strengthened.

First, Ssangyong Construction can pioneer new overseas markets through various methods such as infrastructure projects and urban development projects in Latin American countries, as well as projects ordered by Global Sea Group affiliates. Additionally, it is expected to create new business opportunities by utilizing the networks Ssangyong Construction has established in the Middle East, Malaysia, and Singapore.

Synergy among group affiliates is also anticipated. Ssangyong Construction has maintained sales of about 1.4 trillion KRW since 2019, holding steady for three years, indicating a need for additional growth drivers. A company official explained, "Sea STX Entech, which operates in the plant business, can support Ssangyong Construction in expanding its business." Last year, the plant business accounted for less than 3% of Ssangyong Construction's total sales. Furthermore, Ssangyong Construction is expected to create new growth opportunities in connection with Balmax Technology, a specialized LNG and eco-friendly hydrogen energy company, and to show meaningful results in ESG (environmental, social, and governance) management.

According to the Ministry of Land, Infrastructure and Transport, Ssangyong Construction recorded a construction capacity evaluation amount of 1.45 trillion KRW this year, ranking 33rd in contract ranking. The evaluation amount is calculated by summing the construction performance evaluation, management evaluation, technical capability evaluation, and credibility evaluation, with construction performance and management evaluations accounting for a large portion. Ssangyong Construction received excellent marks for construction performance but somewhat disappointing results in management evaluation.

With Global Sea Group confirming the paid-in capital increase, the financial environment is expected to improve significantly. In particular, the debt ratio will decrease from 600% to the mid-200% range. Ssangyong Construction expects that the improved financial environment will lead to credit rating upgrades, reduced financial costs, and increased construction capacity evaluation. This will positively impact Ssangyong Construction's competitiveness in securing orders and expanding the order market, and is also expected to enhance competitiveness in the domestic market, including remodeling and urban maintenance projects.

Kim Gi-myeong, President of Global Sea, stated, "By acquiring Ssangyong Construction, Global Sea Group has enhanced the group's growth potential and secured new growth engines to achieve the 'Vision 2025' goal and become a centennial company," adding, "Global Sea Group and Ssangyong Construction will strengthen their influence in the global market and create various business opportunities."

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