[Special Stock] KG Mobility Plummets Following Decision on 80% Free Capital Reduction

KG Mobility is experiencing a sharp decline in early trading following the decision to implement an 80% free capital reduction.

As of 9:50 a.m. on the 11th, KG Mobility is trading at 4,020 KRW, down 14.65% (690 KRW) from the previous session.

On the previous day, KG Mobility announced through a public disclosure that it will reduce the par value of 1,964,042,540 common shares with a par value of 5,000 KRW to a par value of 1,000 KRW. Accordingly, the capital will decrease from 982 billion KRW to 196.4 billion KRW. However, since this is a free capital reduction through par value reduction, the number of issued shares before and after the reduction will not change. The capital surplus generated from the reduction will keep the total equity unchanged.

KG Mobility cited "deficit compensation and financial structure improvement" as the reason for this capital reduction decision. If approved by a normal resolution at the shareholders' meeting on the 26th, stock trading will be suspended from April 10 to May 8. The company plans to list the new shares on May 9.

A free capital reduction means reducing capital by merging shares or lowering the par value of shares without compensation to shareholders. The capital surplus generated from the free capital reduction is used to offset accumulated deficits, thereby avoiding capital erosion.