Dynamic Design Decides on Free Capital Reduction to Offset Deficit

[Asia Economy Reporter Jang Hyowon] Dynamic Design announced on the 24th that it has decided on a 30:1 free capital reduction to cover accumulated losses and improve its financial structure.

The method of capital reduction involves consolidating 30 registered common shares with a face value of 500 KRW each into 1 registered common share with the same face value. Once approved at the regular shareholders' meeting scheduled for March 29, the number of shares will decrease from 158,289,246 to 5,276,308.

The company's capital will decrease from 79.1 billion KRW to 2.6 billion KRW, a reduction of 76.5 billion KRW, and accumulated losses will also decrease from 125 billion KRW to 48.5 billion KRW. The record date for the share consolidation rights allocation is April 14, and the effective date is April 15.

The trading suspension period due to the share consolidation is scheduled from the 13th to the 2nd of next month. Fractional shares less than one share resulting from the consolidation will be paid in cash based on the closing price on the first day of the new shares' listing. The new share listing date is scheduled for May 3.

In addition to the free capital reduction, Dynamic Design has been working on improving its financial structure through various methods. It sold domestic non-performing assets for 31.5 billion KRW and has been conducting management diagnostics of domestic and overseas subsidiaries, as well as improving production processes and reducing costs through external consulting, reportedly achieving synergy effects beyond expectations.

Hwang Eungyeon, CEO of Dynamic Design, stated, “In order to satisfy shareholder interests amid rapidly changing external economic conditions, the company is conducting various reviews from the perspective of business diversification,” adding, “To achieve business goals, we will promote intensive management innovation activities, strengthen production capabilities at headquarters and overseas subsidiaries (Europe, China, North America) to carry out customer-tailored marketing activities, and establish a new subsidiary in Indonesia to enhance our business capabilities as a Global Player.”

He continued, “Following intensive business restructuring in 2021 to build an aggressive management system, we are making proactive investments to strengthen business capabilities in 2022 and plan to achieve challenging business goals in 2022 to realize operating profit in the black.”

A representative of Dynamic Design said, “This free capital reduction is an unavoidable process for management normalization, and it was a decision made after careful consideration to minimize shareholder damage,” adding, “Since the stability of maintaining the listing can be secured, it is expected to contribute to enhancing shareholder value to some extent.”