Hotel Nongshim Finally Liquidated... Mega Mart to Absorb Merge in February Next Year

Hotel Nongshim exterior./Photo by Hotel Nongshim

[Asia Economy Reporter Song Seung-yoon] Hotel Nongshim, a hotel business subsidiary of Nongshim, will undergo corporate liquidation procedures.

Megamart announced on the 16th through a public disclosure that it will absorb and merge Hotel Nongshim. The merger will be conducted at a 1-to-0 ratio without issuing new shares. The merger date is set for February 17 of next year.

Since Shin Dong-ik, Vice Chairman of Megamart, was appointed CEO of Hotel Nongshim in October, Hotel Nongshim has been in the process of corporate dissolution. At that time, the Hotel Nongshim corporation only held licenses for alcoholic beverage manufacturing and sales, and businesses involving employment had already been wound down.

The main business units, the room division and the contract catering division, were sold to Nongshim and Brown F&B respectively, and the employees became affiliated with those companies. Therefore, even after the corporate liquidation, Nongshim will continue to operate the hotel.

Hotel Nongshim began operations in 1960 by acquiring Dongnae Tourist Hotel. In 2002, it rebuilt and opened the current building and changed its name to "Hotel Nongshim." It operated several business sites including Heosimcheong Hot Springs, but after COVID-19, it recorded operating losses of 4.4 billion KRW in 2020 and 6.1 billion KRW last year. As of the end of last year, its total capital was in a state of complete capital erosion.