Integrating Hotel and Golf Course Operation Capabilities
into Development and Construction Businesses
On July 1, Kolon Global announced that it will absorb and merge with MOD, an unlisted company that operates golf courses, resorts, and hotels, as well as Kolon LSI, an asset management firm. The merger will be carried out by issuing new shares, which will be exchanged for existing shares. The merger ratios are 1 for Kolon Global, 1.5 for MOD, and 0.99 for Kolon LSI. After a shareholders’ meeting scheduled for August 12, the merger will be completed on October 1, with the new shares to be listed on October 22.
The company stated, “Kolon Global, which has a high proportion of construction business, will build a broader business portfolio by adding the hotel, resort, and golf course operation capabilities of MOD and Kolon LSI to its existing development and construction-centered operations. Through this, we aim to hedge against construction market volatility and generate stable cash flows.”
MOD currently operates the Mauna Ocean Tourist Complex in Gyeongju and the Cappuccino Hotel in Gangnam-gu, Seoul. Kolon LSI, in addition to managing Kolon Hotel, Garden Golf Course, and highway rest areas under contract, has expanded its business to include the Foco Hotel in Seongsu-dong, apartment defect repairs, and F&B group catering services.
Kolon Global, which is engaged in energy and environmental businesses such as wind power, water treatment, and waste management, plans to establish a value chain encompassing everything from development to operation through this merger. The company explained that the merger will bring in high-quality assets owned by MOD and Kolon LSI, increasing Kolon Global’s equity capital. As a result, the company expects improvements in its financial structure, such as a reduction in the debt ratio.
The merger ratios were determined by an accounting firm in accordance with the Capital Markets Act, with a focus on enhancing shareholder value by prioritizing asset value over market capitalization.
A Kolon Global representative stated, “This merger is a strategic decision to overcome construction market volatility and maximize synergy through stable operation businesses. Based on a business portfolio that covers the entire life cycle of real estate assets, from development to operation, we will pursue continuous growth.”
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