South Korean home appliances maker Dongbu Daewoo Electronics will issue new shares this month and offer them to existing shareholders. Dongbu Group chairman Kim Joon-gi is expected to shell out 6 billion won from his own pocket to buy the new shares.
Industry insiders said on June 6 that Dongbu Daewoo Electronics will issue 25 billion won worth of new stocks sometime this month to offer them to Dongbu Group, which owns a 50.6 percent stake in Dongbu Daewoo Electronics. Approximately 6 billion won will come from Dongbu Group chairman Kim and the remaining 19 billion won from Dongbu Group affiliates.
All the new stocks to be issued will be non-voting convertible preferred stocks, so financial investors (FI), who own a 49.9 percent stake in Dongbu Daewoo Electronics, will not see any pullback in their voting rights and dividends.
An official from Dongbu Daewoo Electronics said: “It is hard to disclose exactly how much each affiliate will bear given the different circumstances of affiliates across the group. We’re currently considering a plan whereby Chairman Kim covers 6 billion won with the rest coming from Dongbu affiliates.”
The official added: “The issuance of new stocks is aimed at funding the development of a premium product line-up, such as double door refrigerators and large washing machines. It has little to do with our efforts to keep our net assets above the threshold of 180 billion won.”
