Kumho Petrochemical Decides on Treasury Stock Exchange and Cancellation with OCI

Kumho Petrochemical Strengthens Activities to Enhance Shareholder Value

[Asia Economy Reporter Hwang Yoon-joo] Kumho Petrochemical announced that it will mutually exchange some of the treasury shares held by each company to strengthen its strategic partnership with OCI. At the same time, Kumho Petrochemical announced the cancellation of some of its treasury shares and a shareholder return policy, signaling the start of active efforts to enhance shareholder value.

On the 15th, Kumho Petrochemical disclosed its decision to dispose of treasury shares and acquire OCI shares. Kumho Petrochemical will exchange approximately KRW 31.5 billion worth of its currently held treasury shares for an equivalent value of OCI treasury shares. Accordingly, as of December 16, Kumho Petrochemical will hold 298,900 common shares of OCI, and OCI will hold 171,847 common shares of Kumho Petrochemical.

This treasury share exchange is the first cooperation plan announced by the two groups following the establishment agreement of a bio ECH joint venture signed on the 1st between Kumho P&B Chemicals, a subsidiary of Kumho Petrochemical, and OCIMSB, a Malaysian subsidiary of OCI. Furthermore, based on this partnership, both companies plan to continue efforts to enhance their joint competitiveness in the chemical industry, where the value of ESG management is increasingly important.

In addition, Kumho Petrochemical has decided to cancel some of its currently held treasury shares. The cancellation amount is approximately KRW 31.5 billion, corresponding to 171,847 shares.

The cancellation of treasury shares is a representative shareholder return policy that increases earnings per share by reducing the total number of issued shares, thereby enhancing the value of shares held by shareholders.

Moreover, Kumho Petrochemical announced a shareholder return policy to allocate 25-35% of separate net income as shareholder return funds over the next 2-3 years and to promote treasury share repurchases and cancellations in addition to the existing dividend policy. Kumho Petrochemical plans to utilize its currently held treasury shares for investments such as new business ventures or securing stable raw materials (JV establishment) while concurrently conducting cancellations.

Kumho Petrochemical will continue to explore various measures to ensure that the company’s sustainable growth leads to enhanced shareholder value and will strengthen its shareholder-friendly management stance.