June 29, 2022

Samsung Group’s ship building unit, Samsung Heavy Industries Co. announced to allot part of new shares to six of its affiliates, including Samsung Electronics Co. The move by the company comes as it suffers from continued losses.

The company through selling of 250 million common shares at 5,130 won per share plans to raise 1.28 trillion won ($1.1 billion) in order to repay its debt and develop eco-friendly shipbuilding technologies. From them, 50 million shares, or 20 percent, have already been sold to the company’s workers for 256.5 billion won.

According to reports, the shipbuilder’s board of directors later in the day had decided to sell 33 million shares to Samsung Electronics for 171 billion won. This raises the electronics maker’s stake in the shipbuilder to 16 percent.

Division of shares

• The board of directors have decided to allot 4.5 million shares worth 23.1 billion won to Samsung Electro-Mechanics Co., increasing the latter’s stake in the shipbuilder to 2.2 percent.
• The insurance affiliate, Samsung Life Insurance Co. will buy 63.9 billion shares for 32.7 billion won, raising its stake in the shipbuilder to 3.1 percent.
• Three other group affiliates — Samsung SDI Co., Samsung C&T Corp., and Cheil Worldwide Inc. will also buy the new shares in the shipbuilding company.

According to Samsung Heavy, the total amount of the new shares to be purchased by the six companies will come to 233.5 billion won. In a situation where shareholders fail to buy the rest of the shares, they will be offered to the public on Nov. 2 and 3.

The new shares will be traded on the main stock market starting Nov. 19.

Samsung Heavy has named Korea Investment & Securities Co., NH Investment & Securities Co., and Mirae Asset Securities Co. as co-managers for the share sale.

According to reports, the shipbuilder had been suffering an accumulated deficit of over 2 trillion won. It had to cut its capital stock from 3.15 trillion won to 630 billion won by reducing the face value of its ordinary shares and preferred shares from 5,000 won to 1,000 won in July.

The company will use the capital surplus from the capital reduction will be used to repay the shipbuilder’s debts.3