Craft beer maker HanWool & Jeju plans to approve a free capital reduction at the regular shareholders meeting on the 26th of this month. The move aims to improve a deteriorated financial structure caused by years of operating losses.
The reduction will be a free capital reduction via a reverse stock split, merging 10 existing common shares into 1 share. If the free capital reduction agenda item is approved at this month's regular shareholders meeting, the company's total number of issued shares will fall from 22,149,847 to 2,214,984, and its capital will decrease from about 11.075 billion won to 1.107 billion won. Accumulated deficits of about 9.967 billion won will be covered.
A company official said, "This free capital reduction decision is a measure to cover accumulated deficits and normalize the financial structure, and based on future financial stability, it will lay the groundwork for management normalization and enhanced corporate value."
The company official also said, "Although the number of shares decreases in proportion to the reduction ratio, the per-share value is adjusted by the same ratio, so the reduction does not damage corporate value," adding, "In the long term, we will grow into a solid company and fulfill our responsibility to enhance the value of the corporations and shareholders."