Activist fund Truston Asset Management said on the 11th it sent a public shareholder letter to KCC centered on monetizing Samsung C&T shares and canceling treasury shares. Truston Asset Management holds 1.87% (166,225 shares) of KCC's total issued shares.
The shareholder letter contains four key shareholder proposals: amending the articles to create a nonbinding shareholder proposal system, monetizing noncore assets such as Samsung C&T shares, canceling treasury shares, and resetting the shareholder return policy.
Truston Asset Management analyzed that excessive holdings of Samsung C&T shares are driving KCC's undervaluation. The company noted, "Inefficient capital allocation caused by excessive noncore asset holdings is making the stock trade at about a 55% discount to net asset value (NAV)."
The value of KCC's equity stake in Samsung C&T is about 4.9 trillion won, exceeding KCC's market capitalization (4.1 trillion won). Truston said, "Maintaining high-interest borrowings while holding monetizable noncore assets is a structure that damages shareholder value."
Truston Asset Management analyzed that if exchangeable bonds (EB) are issued backed by Samsung C&T shares, reducing interest expenses on high-interest borrowings could enhance shareholder value by about 54.6%. It added that if Samsung C&T shares are sold to eliminate the discount, shareholder value could rise by as much as about 78.3%.
Regarding treasury shares, it said, "Holding 17.2% of issued shares as treasury stock without a specific plan is a dereliction of duty by the board," adding, "To restore market trust, it is essential to establish an immediate cancellation plan."
It also demanded that the KCC board provide a response to the public shareholder letter by the 11th of next month.