Jeju Beer "Undertakes Structural Reform through Free Stock Dividend"

Jeju Beer (CEO Shin Sung-hyun) announced on the 17th that it has decided to implement a free capital reduction to cover accumulated losses and improve its financial structure. This free capital reduction involves consolidating 5 common shares into 1 share, with the record date set for August 5.

After the free capital reduction, Jeju Beer's capital will change from the existing KRW 29.283 billion to KRW 5.856 billion. The number of shares will decrease from 58,566,091 common shares before the reduction to 11,713,218 shares.

Jeju Beer stated that this free capital reduction aims to improve its financial health and lay the groundwork for expanding into overseas markets. Earlier in April, Jeju Beer’s former CEO Moon Hyuk-gi and MBH Holdings completed a stock transfer agreement to sell 8,643,480 shares to Double HM and two other transferees for KRW 10.1 billion.

As of the end of last year, Jeju Beer’s accumulated losses stood at approximately KRW 86.7 billion, and its capital impairment ratio was 22%, indicating partial capital erosion. According to KOSDAQ market listing regulations, if the capital impairment ratio exceeds 50% or if shareholders’ equity falls below KRW 1 billion, the company will be designated as a management item, and if the capital is fully eroded, delisting may occur.

In response, Jeju Beer proactively implemented financial restructuring to eliminate concerns about being designated as a management item, and it is expected that the capital impairment will be resolved after the free capital reduction.

Jeju Beer’s first-quarter sales reached KRW 5 billion, a 7.2% increase compared to the same period last year. Although the operating loss was KRW 1 billion during the same period, the deficit narrowed by 50% compared to the previous year, indicating that the company plans to focus on normalizing management this year.

In particular, Jeju Beer plans to actively target domestic and international markets this year, capitalizing on the K-Food wave and the Paris Olympics special demand.

A Jeju Beer representative said, “We understand that investors have many concerns regarding this free capital reduction news. However, we hope it will be understood as a growing pain for Jeju Beer’s long-term growth into a global F&B company.”

They added, “Through this capital reduction, we aim to resolve the accumulated losses that have been building up even before the change of the largest shareholder and improve our financial structure to promote global business expansion. All executives and employees are doing their best to protect shareholders’ rights, so please trust us and watch over us.”

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