Life Asset Management demanded that KCC, which decided to issue exchangeable bonds (EB), disclose plans for how it will use Samsung C&T shares worth 3 trillion won.
According to the financial investment industry on the 25th, Life Asset Management said in an open letter to shareholders sent to KCC that it "should have first used Samsung C&T shares that exceed its market capitalization," noting that "even though it could have structured an EB backed by Samsung C&T shares that had long made limited contributions to revenue, it used treasury shares first and shocked the market."
Regarding the EB issuance, the argument is that if the purpose was liability repayment, it should have prioritized Samsung C&T shares, a noncore, low-revenue asset, instead of treasury shares. As of the end of June, KCC holds 17,009,518 Samsung C&T shares (10.01% equity). Based on the previous day's closing price, they are worth 329.47 billion won.
Accordingly, Life Asset Management demanded that KCC specify its plans to use the Samsung C&T equity it holds.
Life Asset Management said, "The equity value of Samsung C&T held by KCC is larger than KCC's market capitalization as of the previous day," adding, "Disclose plans to use noncore idle assets such as the Samsung C&T equity as well."
It continued, "Given that KCC's core business is worth 5 trillion won, if it disposes of all Samsung C&T shares, the corporate value would reach 8 trillion won," and if use was deferred because Samsung C&T's share price was low, it also demanded the internally assessed fair value of Samsung C&T shares and the basis for that assessment.
Kang Dae-gwon, CEO of Life Asset Management, said, "If KCC discloses plans to use the Samsung C&T equity, a noncore asset larger than its market capitalization, market confidence will recover quickly," adding, "We look forward to promptly sharing the board's discussion results on the proposals stated in the shareholder letter."
Earlier, KCC announced the previous day that it would issue 400 billion won-level exchangeable bonds (EB) backed by treasury shares. As EB issuance rather than cancellation was revealed, disappointment-driven selling emerged and the share price fell more than 11% that day.
As of the previous day, Life Asset Management holds about a 1.24% equity stake in KCC's outstanding shares.