DL E&C Incorporated as a 100% Subsidiary of DL Construction
DL E&C announced on the 18th that it has resolved to enter into a stock exchange agreement with DL Construction. On the same day, DL Construction also held a board meeting and approved the proposal to enter into a comprehensive stock exchange agreement with DL E&C.
Accordingly, DL E&C will issue new shares and carry out a stock exchange by delivering shares to DL Construction shareholders at an exchange ratio of 1 to 0.3704268.
Through this comprehensive stock exchange, the two companies plan to eliminate the dual listing structure where the parent and subsidiary companies engaged in the same construction business are simultaneously listed on the Korea Exchange, and to enhance capital and management efficiency to maximize shareholder value.
Since DL E&C will proceed with the stock exchange as a small-scale stock exchange under Article 360-10 of the Commercial Act, the stock exchange will be conducted with the approval of the board of directors instead of a general shareholders' meeting.
For DL Construction shareholders who oppose the stock exchange, a shareholder protection procedure will be properly implemented by allowing a stock purchase request from the date of the shareholders' meeting until January 10 of next year.
DL Construction’s extraordinary shareholders' meeting is scheduled to be held on December 21. Upon approval at the shareholders' meeting, subsequent procedures will be followed to complete the stock exchange early next year, and the company will become unlisted in March next year.
Meanwhile, DL E&C stated that to prevent dilution of existing DL E&C shareholders’ equity due to the newly issued shares during this comprehensive stock exchange process, it plans to cancel treasury shares of common stock equal in number to the newly issued DL E&C common shares.
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However, the number of newly issued shares will be finally confirmed after January 10 of next year, when the exercise period for DL Construction shareholders’ dissenting purchase requests ends, and the number of shares to be canceled will also be finalized in a separate board meeting early next year to match the scale of the new share issuance.
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