Domestic private equity fund (PEF) manager STIC Investments said on the 6th that "there are no plans currently under discussion for canceling, disposing of, or using treasury shares for mergers and acquisitions (M&A)." It came a day after activist fund Align Partners Asset Management, the third-largest shareholder, demanded confirmation that there were no plans to dispose of treasury shares.
A STIC Investments official said, "There is no change in the principle that treasury shares will ultimately be used to enhance corporate value, and further, shareholder value," and added, "Any future decision on this will be executed with top priority on enhancing corporate and shareholder value, in strict compliance with internal rules and the law."
Align Partners Asset Management said the previous day that if the purpose is to raise funds for M&A, they can be sufficiently raised through alternative methods such as using existing cash, borrowing, or paid-in capital increases, and asked STIC Investments' board to confirm that it is not considering arbitrary disposal of treasury shares.
Align argued the previous day that arbitrary disposal to a third party could constitute a violation of the Commercial Act after STIC Investments disclosed on the 3rd that it is "reviewing in various ways a plan to use treasury shares to secure growth drivers for the company going forward."
In a treasury share report attached to its business report in March, STIC Investments presented purposes for holding more than 13% in treasury shares, including "strengthening shareholder returns," "responding swiftly to strategic investment opportunities such as mergers and acquisitions (M&A)," and "performance compensation for executives and employees."
Regarding the disclosure on the 3rd, STIC Investments said that day, "It appears (Align) is making a blanket assumption and misunderstanding it as arbitrary third-party disposal of treasury shares," adding, "We only referred to general principles regarding the disposal of treasury shares and did not imply any specific decision to sell treasury shares or any other meaning."
Currently, the equity stake of STIC Investments' largest shareholder (Chair Do Yong-hwan and related parties) is 19.13%. Other shareholders include U.S. investment firm Miry Capital (13.38%), Align (7.63%), and Petra Asset Management (5.09%). Align said the previous day it will soon release a shareholder letter containing recommendations to enhance STIC Investments' corporate value.