Doosan Throws 'Shareholder Persuasion' Trump Card... Direct Breakthrough in Business Restructuring

Doosan Enerbility, Bobcat, Robotics
CEOs of Three Doosan Group Affiliates
Send Shareholder Letter Outlining Growth Strategy
"Pursuing Shareholder Interests and Company Growth Simultaneously"

On the 5th, the CEOs of three Doosan Group affiliates, which are preparing for a business structure reorganization, sent shareholder letters outlining growth strategies and promised active communication with shareholders. Amid crises including controversy over the merger ratio, the Financial Supervisory Service's rejection of the securities registration statement, and the political sphere's 'Doosan Bobcat Prevention Act,' this move is interpreted as a decisive effort to clear misunderstandings and persuade shareholders.

The CEOs of Doosan Enerbility, Doosan Bobcat, and Doosan Robotics began their shareholder letters, which were pre-released on each company's website the day before, with statements such as "We apologize for not providing sufficient prior explanation," "We apologize for causing concern to our shareholders," and "We acknowledge the deep concerns of our shareholders." This marks the first time since the board resolution on business restructuring on the 11th of last month that the CEOs have stepped forward to persuade shareholders amid the cold public opinion.

Following their apologies, the CEOs emphasized, "This opportunity will be a good chance to simultaneously promote shareholder assets and company growth."

Park Sang-hyun, CEO of Doosan Enerbility, stated that through the merger with Doosan Bobcat, there will be an investment capacity of about 1 trillion KRW, which will be focused intensively on the nuclear power business. He emphasized the need to expedite facility expansion to secure additional orders. Park said, "Following the Czech nuclear power plant, new nuclear power plant orders are expected from Poland, the United Arab Emirates (UAE), Saudi Arabia, and others, making it possible to expect a total of around 10 units, including the Czech plant, over the next five years." Regarding the Small Modular Reactor (SMR) business, he added, "Recently emerging as a promising alternative to meet power demand for AI, there is a strong possibility of significantly exceeding the company's five-year target of 62 units."

Park explained, "The currently planned orders far exceed the company's capacity to manufacture main nuclear power plant equipment," and added, "We have set a goal to stably secure facilities to produce more than four large nuclear power plants annually and to expand SMR production facilities to a scale of 20 units per year over the next five years." He further expressed, "Securing cash and additional borrowing capacity is very important to acquire new technologies and timely expand production facilities." He mentioned that by splitting Doosan Bobcat, borrowings can be reduced by 700 billion KRW, and by disposing of non-operating assets, 500 billion KRW in cash can be secured to improve the financial structure. This will create additional borrowing capacity and about 1 trillion KRW in new investment capacity, enabling rapid investment in facility expansion.

From the left, Park Sang-hyun, CEO of Doosan Enerbility; Scott Park, CEO of Doosan Bobcat; Ryu Jeong-hoon, CEO of Doosan Robotics
[Photo by each company]

Scott Park, CEO of Doosan Bobcat, stated that through integration with Doosan Robotics, the goal is to secure unmanned and automation technologies and to lead the market. Regarding the stock exchange ratio with Doosan Robotics, he said, "The stock market price is a value formed over a considerable period based on independent judgments of company value by numerous market participants," and "The exchange value between the two companies is not significantly different even when compared to the average stock price of both companies this year." He added, "All treasury shares acquired through the exercise of stock purchase rights, in addition to the treasury shares already held, will be canceled," and "We will maintain the dividend size and actively pursue 'value-up' plans based on the business performance of the integrated corporation."

Ryu Jeong-hoon, CEO of Doosan Robotics, emphasized plans to expand robot sales by utilizing the North American and European market networks and business infrastructure through integration with Doosan Bobcat. Regarding the stock exchange ratio between the two companies, Ryu said, "The company's value in the stock market is based on various grounds including past and current performance, future potential, and technological capabilities," and "The company has grown at an average annual rate of 20%, exceeding the global collaborative robot market growth rate every year for the past three years."

On the 11th of last month, the three Doosan companies held a board meeting and approved a governance restructuring plan including subsidiary spin-offs, mergers, and comprehensive stock exchanges. The plan involves a spin-off of Doosan Enerbility into a surviving company and a newly established company, followed by merging the new company into Doosan Robotics. Subsequently, through a comprehensive stock exchange, Doosan Bobcat will become a 100% subsidiary of Doosan Robotics, and the two companies will merge later. Upon completion of the procedure, Doosan Co., Ltd.'s indirect stake in Doosan Bobcat will increase from 14% to 42% without additional capital injection, strengthening the controlling shareholder's power. The three Doosan companies will hold an extraordinary general meeting of shareholders on the 25th of next month to submit this governance restructuring plan. The spin-off and merger require a special resolution at the shareholders' meeting, with approval from at least two-thirds of attending shareholders and one-third of issued shares.

A Doosan official said, "Shareholders holding Doosan Bobcat shares will receive shares of the merged company, which is an integrated corporation combining advanced robotics and construction machinery both practically and economically," and "The integrated corporation will inherit Doosan Bobcat's current dividend policy and maintain the dividend size per share in the future." He added, "We will continue to communicate more with shareholders, including through this letter."

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