IPOs highlight imminent successions over at Korean chaebol

Southern region Korean business magnates are really gearing up for initial customer offerings of conglomerates’ online marketers, in an apparent bid enabling their siblings to take advantage of their stock holdings off the proposed exit under the specific business succession plans.

Market watchers have an understanding of the moves as the thrill to give cash-hungry siblings scenarios to solidify legitimate control over the family-owned conglomerates this site, which include buying shares inside a group’s key affiliate about this stands on top of the developed governance structure and repaying necessary taxes.  

On Weekend, CJ Olive Young routed requests for bids which can investment banks to undertake their IPO proceedings as underwriters, eyeing a stock market service by the first half of in 2012.

The news comes months after CJ Olive Young closed an important pre-IPO deal at a 1 . 8 trillion won ($1. 5 billion) valuation located in March. CJ Olive Youngster raised 414. 1 million won in proceeds from Korea-based Glenwood Private Equity in Goal, in exchange for a 22. 56 percent stake in CJ conglomerate’s health and beauty subsidiary company.

The question is if the proposed IPO of CJ Olive Young, which manages over 1, 200 drugstores, could accelerate the succession of Korea’s 13th-largest chaebol CJ Group, now control by Chairman Lee Jay-hyun.

Lee‘s eldest son Sun-ho was grasping an 18 percent share in CJ Olive Younger, and eldest daughter Kyung-hoo was holding a 6 percent ownership, until end-2020. Their control had been diluted due to the introduction of Glenwood as a new shareholder earlier this year and the siblings’ partial stake selloff to the investor.

CJ Olive Young logged 58. 4 billion won in online profit in 2020, repayments 5 times higher than the previous several weeks. The company was spun removed from the conglomerate’s information technology left arm CJ Olive Networks about 2019.

With CJ Olive Young’s IPO underway, the company probably will determine how many shares Sun-ho and Kyung-hoo would selling through the IPO procedures, also what valuation CJ Olive Young can go public.

The market is also processing a close eye on the siblings’ potential ownership in good holding company CJ Corp.

Sun-ho owned 2 . 75 zero per cent of common shares over CJ Corp. and Kyung-hoo held 1 . 19 percentage point voting rights.

But beyond their personal common shares, both Sun-ho and Kyung-hoo held within 1 million convertible desire shares in CJ Corp., respectively. These securities actually are trading on the stock market within the 20 percent discount compared to CJ Corp. ’s ordinary stocks and shares.

In the meantime, one family-owned conglomerate Hyundai Electric motor Group has openly embarked on the IPO process of for civil engineering arm Hyundai Engineering on Thursday.

According to the Korea Exchange, Hyundai Engineering surpassed in documents for a page application on the nation’s upper bourse Kospi. The company can be subject to an abridged inspection process by the bourse buyer, so that it can submit this prospectus to the financial authority before year-end. Its underwriters are Mirae Asset Sec, KB Securities and Goldman Sachs Seoul Branch.

The INITIAL PUBLIC OFFERING process, at which the company aims up to 10 trillion triumphed in in equity value, is always expected to give Hyundai Motor Chairman Chung Euisun a chance to secure cash to employ a full-fledged succession regimen.

As of June, Chung held some 11. 72 percent stake in Hyundai Engineering.

Chung displays several options to resolve the several circular cross-shareholding structure yet pursue a transparent governance of the auto giant, which is the second-largest chaebol, along with increasing his stake about what could become the group’s synergie company such as Hyundai Mobis.

Nonetheless , their IPO attempt at the very valuation they envision could face a road block, given that market uncertainties in the home and abroad are cooling down investor sentiment, especially toward the new entrants on the domestic stock market.

According to the KRX, stocks that were listed during the third quarter saw their price rise 49 percent on average on the debut session’s closing from the IPO price set during the book building process. This was significantly less than 72 percent over the course of the very first half.

By Son Ji-hyoung ( consnow@heraldcorp. com )

IPOs highlight imminent successions over at Korean chaebol
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