Korea Ratings: "Samsung Biologics Spin-Off Has Limited Impact on Existing Bond Creditworthiness"

Korea Ratings stated on the 26th that the impact of Samsung Biologics' spin-off on the creditworthiness of already issued corporate bonds is limited.

On May 22, Samsung Biologics decided through a board resolution to carry out a spin-off of its business division responsible for managing subsidiaries, including Samsung Bioepis, which is engaged in biosimilar development.

Korea Ratings explained, "Through the spin-off, the surviving company (Samsung Biologics) will focus on the bio contract development and manufacturing organization (CDMO) business," and added, "The newly established company (tentatively named Samsung Epis Holdings) is expected to serve as an investment holding company owning shares in Samsung Bioepis and to invest in new bio-related businesses."

The agency further stated, "According to the spin-off plan, all existing corporate bonds will remain with the company (the surviving entity)," and added, "Under the Commercial Act, both the newly established company and the surviving company are jointly liable for the debts of the company prior to the spin-off. Therefore, the impact of the spin-off on the credit rating of existing unsecured bonds is limited."

Korea Ratings expects Samsung Biologics' financial structure to remain stable. The agency said, "Due to the spin-off, the main subsidiary Samsung Bioepis will be excluded from consolidated financial statements, resulting in a reduced business portfolio for the surviving company. Nevertheless, based on large-scale facilities, strong market position, favorable order environment, and enhanced external credibility, the company is expected to maintain excellent order performance."

Korea Ratings also stated, "Considering the strong operating cash generation and accumulated financial capacity of the bio CDMO business, the company is expected to maintain a stable financial structure even after the spin-off," and added, "The decline in future debt repayment capacity due to the spin-off is not expected to be significant."

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