[Featured Stock] Copra Expected to Merge with Ecobio... BGF Group's Key Affiliate Support

Published 05 Jul.2022 09:21(KST)

[Asia Economy Reporter Hyungsoo Park] Kopra is showing strong performance. The news that it has incorporated BGF Ecobio as a subsidiary and is also considering a merger appears to be influencing its stock price.

As of 9:21 AM on the 5th, Kopra is trading at 6,630 KRW, up 16.52% from the previous day.

BGF, the holding company of the BGF Group, has restructured its governance by incorporating BGF Ecobio as a subsidiary of Kopra (KOPLA) to strengthen competitiveness in the materials sector. BGF held a board meeting the previous day and approved a proposal to contribute BGF Ecobio shares to Kopra as a non-cash contribution and to acquire new shares issued through a paid-in capital increase. The shares contributed in kind are 60,000 common shares of BGF Ecobio, valued at approximately 28 billion KRW. Kopra will acquire 100% of BGF Ecobio's shares.

This move was made to improve management efficiency in the materials sector, which is a new growth engine for the BGF Group, and to maximize synergy between businesses. BGF stated in a disclosure that it is also considering a merger between Kopra and BGF Ecobio in the future.

Kopra focuses on engineering plastic compounding business, utilizing materials such as PA6, PA66, and PP, and holds a diverse portfolio across industries including automotive, electrical and electronics, and construction. BGF Ecobio covers bio-plastics such as PLA and PBAT as well as recycling materials, concentrating on the consumer goods market. BGF expects that by leveraging the strengths of the two companies in the industrial and consumer goods sectors, they can establish a foundation for new growth.

A BGF Group official said, "Through the governance restructuring of these two companies with high growth potential, we will be able to further enhance the business competitiveness of the materials sector," adding, "With the ability to share pipelines in both industrial and consumer goods fields, this is expected to become a new growth momentum for the materials business within the group."