Craft Beer 'First Listed' Jeju Beer to Sell Management Rights

Sale of Management Rights to DoubleHM
Decision to Sell Due to Continued Poor Performance

Jeju Beer, the first craft beer company to be listed, has sold its management rights. Although it led market growth by being the first in the industry to be listed on the KOSDAQ market, it appears to have decided to sell due to continued sluggishness caused by recent changes in alcohol trends.

According to the Financial Supervisory Service's electronic disclosure system on the 19th, Jeju Beer agreed to sell 8.64 million shares and management rights held by its largest shareholder MBH Holdings (14.62%) and CEO Moon Hyuk-ki (0.17%) to Double HM at 1,175 KRW per share, totaling 10.156 billion KRW. Double HM, which is acquiring Jeju Beer, is an automobile repair and parts distribution company located in Seongdong-gu, Seoul. Last year, it recorded sales of 2.6 billion KRW and a net profit of 323 million KRW.

Under this contract, Double HM paid 1 billion KRW, which is 10% of the purchase price, as a deposit to MBH Holdings. The interim payment of 5.1 billion KRW is scheduled for April 15, and the remaining balance of 4.1 billion KRW is planned to be paid by the day before the extraordinary general meeting of shareholders on May 8. The management rights of Jeju Beer will be transferred to Double HM simultaneously with the payment of the remaining balance at the extraordinary general meeting held on May 8, after appointing directors and auditors designated by Double HM.

Jeju Beer was the first domestic craft beer company to be listed on the KOSDAQ market of the Korea Exchange in May 2021. At the time of listing, it attracted attention by entering the stock market under the so-called 'Tesla Requirement (special listing for unprofitable companies)' introduced in 2017 to give companies with losses a chance to enter the stock market.

However, it appears to be selling its management rights after facing difficulties such as operating losses and stock price declines. Jeju Beer's sales last year were 22.4684 billion KRW, down 6.3% from the previous year, and operating losses improved by 5.4% compared to the previous year to 10.98436 billion KRW, but exceeded 10 billion KRW for two consecutive years.