[At a Crossroads for Listed Companies] UCI Releases 3.5 Million Shares into Market Due to Stock Sale Contract Cancellation②

[Asia Economy Reporter Jang Hyowon] The stock purchase agreement involving a change in the largest shareholder of KOSDAQ-listed company UCI was canceled midway, releasing 3.5 million shares that had already been transferred into the market. Since these shares were sold in divided portions to multiple parties, their sale on the market does not require disclosure.

According to the Financial Supervisory Service's electronic disclosure on the 17th, UCI announced that the stock transfer agreement made on the 9th with Chairman Gu Bonho of Pantos Holdings and UCI CEO Kim Byungyang was terminated midway.

Previously, on August 3rd, Chairman Gu had signed a contract to transfer 5,952,380 shares (16.8%) held by himself and Pantos Holdings at 2,150 KRW per share, totaling 12.8 billion KRW, to CEO Kim Byungyang, PSN Group and one other, Lemon Invest and five others.

Among these, PSN Group and Lemon Invest paid the remaining 7.525 billion KRW and have already received 3.5 million shares. PSN Group and one other hold 1 million shares (2.83%), while Lemon Invest and five others hold 2.5 million shares (7.08%).

However, CEO Kim did not pay the remaining approximately 5.2 billion KRW, and the remaining 2,452,380 shares (6.89%) remained with Chairman Gu's side.

If this contract had been completed normally, CEO Kim would have become the largest shareholder holding a total of 4,846,364 shares (13.43%), including the 2,393,984 shares (6.54%) he and his personal company, Mercure Advisors, already owned.

As a result, only 3.5 million shares (9.91%) were scattered among eight parties including PSN Group and Lemon Invest. Since each of their holdings does not exceed 5%, there is no obligation to disclose changes in shareholding quantity. Therefore, even if 3.5 million shares flood the market, it is impossible to know who sold them.

The shares taken by the eight parties including PSN Group and Lemon Invest are also not subject to lock-up. According to KOSDAQ regulations, if the largest shareholder changes to a nominal company or investment association, a one-year lock-up applies. Since these parties are not special related parties of the current largest shareholder, Chairman Gu, they are not bound by lock-up.

In fact, UCI's stock price showed a continuous decline after the stock transfer agreement was canceled midway. UCI's stock closed at 2,730 KRW on the 9th but dropped to 2,570 KRW as of the previous day, a 5.86% decrease over five trading days. If PSN Group, Lemon Invest, and others sold their shares during this period, they could have realized gains of 19-26%.

During this period, individual investors acquired UCI shares. Over five trading days since the 9th, foreigners and other corporations net sold 66,683 shares and 13,768 shares respectively, while individuals net bought 55,765 shares.

Regarding this, UCI stated that the company was designated as a management item after receiving an opinion refusal due to insufficient provision of special related party data in the June semi-annual settlement, making it impossible to proceed with the contract involving a change in the largest shareholder. They explained that if the largest shareholder changes while designated as a management item, the company becomes subject to a listing viability review.

However, they clarified that a change in the largest shareholder through a paid-in capital increase is possible, and CEO Kim Byungyang and his company Mercure Advisors plan to become the largest shareholder through such a capital increase.

On the 9th, UCI decided on a third-party allotment paid-in capital increase worth 500 million KRW targeting Mercure Advisors. Once payment is completed, CEO Kim is expected to secure an additional 208,03 shares, holding a total of 2,594,787 shares (7.3%) and becoming UCI's largest shareholder. Chairman Gu, holding 6.89%, will become the second-largest shareholder.

The company stated, "It is unknown whether CEO Kim will acquire the remaining shares previously contracted with Chairman Gu's side after becoming the largest shareholder."