GS Retail Decides on Personnel Split of Parnas Hotel to "Enhance Shareholder Value"

Escape Complex Business Structures... Enhance Corporate Value
Split Ratio GS Retail 0.81: Parnas 0.19
All Treasury Shares Burned... Maintain Dividend Payout Ratio Over 40%

GS Retail is planning a demerger of its subsidiary Parnas Hotel.

On the 3rd, GS Retail announced through a company split decision disclosure that "the aim is to establish a responsible management system by facilitating focused investment in core businesses through specialization by business division, enabling independent management and objective performance evaluation."

Grand InterContinental Seoul Parnas.

This demerger of Parnas will be carried out as a spin-off. Upon completion, the surviving company will be GS Retail, and the newly established company will be Parnas Holdings (tentative name), under which Parnas Hotel and Fresh Meat will be subsidiaries. Both companies are currently subsidiaries of GS Retail.

The split ratio was calculated as 0.8105782 for GS Retail and 0.1894218 for Parnas Holdings. The split ratio was determined by dividing the net asset book value of Parnas and Fresh Meat, the entities subject to the split, by the pre-split net asset book value. The split date for the two companies is scheduled for December 26, and the listing date of the newly established company is set for January 16 of next year.

GS Retail decided on the company split because, despite strong performance from each business division, the complex business structure led to undervaluation of corporate value such as market capitalization compared to competitors in single industries. GS Retail operates business divisions including convenience stores, home shopping, supermarkets, and hotels. Previously, GS Retail had reorganized underperforming businesses such as the health and beauty (H&B) store 'Lalavla', fresh food quick commerce service 'GS Fresh Mall', and design product specialty store '10x10'.

Through this split, GS Retail's strategy is to build a strong distribution business centered on convenience stores, home shopping, and supermarkets. The newly established company, Parnas Holdings, is expected to generate business synergies through the hotel industry and food ingredient processing (Fresh Meat).

GS Retail also plans to enhance shareholder value through this split. Since a spin-off method is chosen, existing GS Retail shareholders will be able to hold shares in both the surviving company and the newly established company according to the split ratio.

Additionally, GS Retail decided to cancel all treasury shares amounting to 1,279,666 shares at the time of the split. This corresponds to about 1.2% of the total shares. The cancellation of treasury shares in the stock market can reduce the number of shares circulating in the market, thereby increasing the value of the shares. GS Retail will maintain the current dividend payout ratio policy of over 40% for each company after the split.

A GS Retail official said, "It is true that each business has been undervalued due to the complex business structure. We expect that measures such as this spin-off and treasury share cancellation will remain a good example of strengthening corporate competitiveness and enhancing shareholder value."