Star SM REITs announced on December 30 that its largest shareholder, Big Festa, has decided to carry out a capital increase of 6.8 billion KRW in order to meet the eligibility requirements for major shareholders reviewed by the Ministry of Land, Infrastructure and Transport. The shares will be issued to Hanul & Jeju.
Star SM REITs has simultaneously improved internal controls and normalized its financial structure, successfully submitting an "unqualified" audit opinion in November. In August, as part of its restructuring efforts, the company changed its largest shareholder to Big Festa, a subsidiary of Hanul & Jeju, and replaced its CEO with Moon Jongguk. In addition, the company has explored a variety of normalization scenarios, including conducting a public sale through Kim & Chang law firm.
This capital increase of 6.8 billion KRW is also part of the company's normalization process. Through this, the company will meet the requirement set by the Ministry of Land, Infrastructure and Transport that "at the end of the most recent business year, equity capital must be at least twice the amount of paid-in capital." Notably, the capital increase is being carried out through a debt-to-equity swap that settles existing internal transactions, rather than bringing in new external funds. This approach is seen as improving the financial structure while also securing the company's viability as a REIT and ensuring regulatory compliance.
A company representative stated, "We are gradually fulfilling the essential conditions for normalization, such as securing an unqualified audit opinion and meeting the eligibility requirements for major shareholders," and added, "Going forward, we plan to pursue asset restructuring and business normalization measures step by step, based on financial stability and sound governance."
The representative further emphasized, "We will resolve uncertainties and lay the foundation for operating as a compliant and stable REIT in accordance with relevant systems and regulations."
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