ANP 2nd Generation, Effectively Becoming 'Largest Shareholder + Performance Improvement' Through In-Kind Contribution

[Asia Economy Reporter Jang Hyowon] ANP, a KOSPI-listed company, will acquire the seat business division of YSP, which became its largest shareholder earlier this month, for 13 billion KRW. YSP became ANP's largest shareholder through a third-party allotment capital increase worth 10 billion KRW and will recover cash by transferring the business this time.

According to the Financial Supervisory Service's electronic disclosure on the 27th, ANP announced that it will acquire all rights, obligations, assets, and liabilities related to YSP's seat business division for 13 billion KRW as of the previous day. The assets amount to 3 billion KRW, and liabilities are 2 billion KRW.

The business division to be acquired is a single business of automobile seat covers, processing raw materials such as natural leather, synthetic leather, and fabric into products. As of last year, it recorded sales of 78.8 billion KRW and operating profit of 6.1 billion KRW. It achieved 62% growth in two years from sales of 48.6 billion KRW in 2019.

YSP, which is transferring the business, is a company wholly owned by CEO Jeon Haksoo, son of ANP CEO Jeon Woon-kwan. On the 3rd of this month, YSP became ANP's largest shareholder through a third-party allotment capital increase worth 10 billion KRW. Essentially, YSP contributed its seat business division as an in-kind contribution and became ANP's largest shareholder.

This business transfer is interpreted as a strategy to break ANP's cycle of losses. Since recording an operating loss of 6 billion KRW on a consolidated basis in 2017, ANP has continued to incur losses until last year. Last year, it recorded sales of 69.3 billion KRW and an operating loss of 12 billion KRW.

Accordingly, ANP spun off its printed circuit board (PCB) business division, which accounts for about 95% of sales, in April. This move aims to separate the loss-making division into a subsidiary to achieve profitability in separate financial statements. If the acquired seat business division generates operating profit similar to last year, ANP can turn to profitability on a separate basis.

Along with this, ANP has recently been focusing on improving its business structure. At the regular shareholders' meeting in March, it added social casino games, blockchain, NFT (non-fungible tokens), and drama, film, and music production to its business objectives.

Additionally, ANP recruited former Phantom Entertainment Chairman Lee Dohyung and established a new corporation called 'Studio2046' last month on the 25th with an investment of 8 billion KRW. This company plans to discover new revenue models and enter new businesses in content, gaming, and NFT markets.

Furthermore, on the 16th, ANP invested 3 billion KRW in a management company called Tokkiwa Geobok. It stated that this investment is for new businesses such as drama and film production. As of the end of last year, this company recorded assets of 400 million KRW, sales of 130,000 KRW, and a net loss of 300 million KRW.