On the 11th, KCC is surging more than 8% intraday. The move is seen as stemming from activist fund Truston Asset Management sending a shareholder letter centered on monetizing KCC's equity stake in Samsung C&T.
As of 11:01 a.m. on the 11th, KCC is trading at 531,000 won on the Korea Exchange, up 41,500 won (8.48%) from the previous session.
Activist fund Truston Asset Management said on the 11th it sent KCC an open shareholder letter centered on monetizing Samsung C&T shares and canceling treasury stock.
Truston Asset Management analyzed that excessive holdings of Samsung C&T shares are driving KCC's undervaluation. Truston noted, "Maintaining high-interest borrowings while holding non-core assets that can be monetized is a structure that damages shareholder value." The value of Samsung C&T equity held by KCC is about 4.9 trillion won, exceeding KCC's market capitalization (4.1 trillion won).
It added that if KCC issues exchangeable bonds (EB) backed by Samsung C&T shares, it could reduce interest expenses on high-interest borrowings and boost shareholder value by about 54.6%. It further said that if Samsung C&T shares are sold to eliminate the conglomerate discount, shareholder value could rise by as much as about 78.3%.