Daehan Electric Wire & Cable Decides on Reverse Stock Split..."To Maintain Appropriate Number of Shares"

Common Shares Consolidated from 10 to 1
Final Decision at Next Month's General Meeting... Relisting in May

[Asia Economy Reporter Kim Pyeonghwa] Daehan Electric Wire has decided to consolidate 10 common shares into 1 share. This is to reduce the excessive number of circulating shares and maintain an appropriate number of shares. It also aims to stabilize the stock price.

Daehan Electric Wire announced on the 22nd that the board of directors held a meeting and made this decision on the stock consolidation. Stock consolidation refers to combining multiple shares to reissue shares with a higher par value. The number of shares and the price per share change according to the ratio. However, capital, shareholding ratio, and amount of stock issuance remain unchanged.

Daehan Electric Wire will consolidate shares at a ratio of 10 to 1. After the consolidation, the par value of common shares will increase from the current 100 won to 1,000 won. The number of issued shares will decrease from approximately 1.24 billion shares to 124 million shares. The capital remains 124.4 billion won, the same as before the consolidation.

[Image courtesy of Daehan Electric Wire]

Through this consolidation, Daehan Electric Wire will reduce the excessive number of circulating shares. Currently, the number of circulating shares is 728 million. This figure excludes the largest shareholder Hoban Industrial’s stake (40%) and treasury shares from the total issued shares. After the consolidation, the number of circulating shares will decrease to about 73.7 million shares.

A Daehan Electric Wire official said, “As the company’s management environment improves through inclusion in the Hoban Group and capital increase, we intend to adjust the number of shares, which increased during past financial restructuring, to an appropriate level,” adding, “We also aim to enhance corporate value.” He continued, “The purpose is to create a positive momentum where the company’s development aspects, such as improved performance and overseas business expansion, can be favorably evaluated.”

Daehan Electric Wire plans to make the final resolution on the stock consolidation at the shareholders’ meeting scheduled for the 30th of next month. On May 16, the consolidated new shares will be relisted. Odd-lot shares that cannot be consolidated will be purchased by Daehan Electric Wire from shareholders in cash based on the closing price on the new share listing date as treasury shares. Meanwhile, Daehan Electric Wire announced in today’s disclosure that its operating profit last year increased by 22% from the previous year to 48.2 billion won. Last year’s sales increased by 23% to 2.4519 trillion won. This is the first time in eight years since 2014 that sales exceeded 2 trillion won.