Park Soon-seok, Chairman of Sinan Group Family Secures About 40% Stake in Insbill
CNT85
CNT85, a KOSDAQ-listed company, will absorb and merge with Insvil, a construction affiliate of the Sinan Group. The shareholders of Insvil include Park Hoon and Park Jiho, the two sons of Sinan Group Chairman Park Soon-seok, as well as his daughter Park Jisuk. Through this merger, Chairman Park's family is expected to secure about 40% of CNT85's shares.
According to the Financial Supervisory Service's electronic disclosure on the 12th, CNT85 announced last month that it would absorb and merge with Insvil. The merger ratio is 1 to 265.6923076 shares. Approximately 265 shares of CNT85 stock will be newly issued per one share of Insvil to its shareholders.
Insvil's shares are held equally at 25% each by four members of Chairman Park's family: Park Hoon, CEO of HuSteel; Park Jiho, Director of HuSteel; Park Jisuk; and Kim Seonghee. After the merger, they will receive a total of 26,569,230 shares, which corresponds to about 38% of CNT85's total shares.
Previously, in 2020, the Sinan Group acquired CNT85 through its affiliate Sinan Capital. At that time, CNT85, formerly known as Poslink, was suspended from trading due to allegations of embezzlement by the previous management. Sinan Capital injected 30 billion KRW through a paid-in capital increase, acquiring management rights and reviving the company. Currently, Sinan Capital holds a 45.93% stake.
Park Hoon, CEO, and Park Jiho, Director, are registered directors of Sinan Capital. Therefore, Sinan Capital and two others will be disclosed as the largest shareholders of CNT85 going forward as related parties of Sinan Capital. Combining the shares of Sinan Capital and Chairman Park's family, the total is expected to be about 66.4%.
In this merger, Insvil's value was appraised at 341,946 KRW per share, totaling 34.2 billion KRW. This figure was calculated as a weighted average of asset value and income value. Insvil operates in housing projects, civil engineering and construction, and real estate leasing and sales. As of last year, it recorded sales of 4.5 billion KRW and an operating loss of 1.4 billion KRW. It has posted operating losses for three consecutive years since 2020.
Currently, Insvil's only business site is the Daejeon Yuseong Metrocan officetel project. Construction has already been completed, and it is currently being sold, but no sales revenue has been generated since 3.3 billion KRW in 2020. According to the company, more than 10 billion KRW worth of units remain unsold. The project developer is Sinan Leisure.
Additionally, in the first quarter of this year, Insvil recorded a net loss of 4 billion KRW after losing a lawsuit related to the Dasan New Town "Sinan Insvil First Foret." The court ruled that Sinan, the apartment developer, submitted false documents claiming the apartment was constructed with a flat slab structure when it was actually built with a wall structure, improperly receiving about 10 billion KRW.
Accordingly, an external appraisal opinion also projected that Insvil would continue to record operating losses until 2025. If CNT85 absorbs Insvil, CNT85 will bear the operating losses and other liabilities. However, Insvil's net assets were valued at 40.1 billion KRW as of the end of last year, which allowed the merger ratio to be calculated at 1 to 265. Regarding this, a CNT85 official stated, "Insvil has a strong track record in land development and substantial reserves, which will help CNT85 secure plant business orders. Also, CNT85's recognition as a Sinan Group affiliate is low, so we expect the Insvil merger to help with external promotion."
Meanwhile, this absorption merger will be finalized at an extraordinary general meeting of shareholders on November 13. The record date for shareholders is November 16. Shareholders opposing the merger can request a stock purchase from October 27 to November 12. The purchase price is set at 1,287 KRW per share. However, if there are too many dissenting shareholders and the purchase amount is excessive, the company may cancel the merger.
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