More than a month after tougher delisting standards aligned with the government's stock market value-up policy took effect, restructuring procedures are gaining traction for listed companies that failed to meet share price and market capitalization requirements.
According to the Korea Exchange (KRX) and the Financial Supervisory Service's electronic disclosure system (DART) on the 9th, as of the 7th, a total of 48 listed companies—38 on KOSDAQ and 10 on KOSPI (excluding preferred shares)—filed disclosures warning of designation as issues under management due to share prices below 1,000 won.
This follows the new "penny stock (shares under 1,000 won)" delisting standard that was newly established and implemented on the 1st of last month. Under the new rule, if the share price stays below 1,000 won for 30 consecutive trading days, the company will be designated as an issue under management from the next trading day. Before designation, if the price stays below the threshold for 25 consecutive trading days, the company must file a disclosure warning of such designation.
On the 5th, which marked the first 25th trading day since the new system was introduced, 43 companies filed designation warning disclosures at once. On the 6th and 7th, three and two more were added, respectively. If those corporations fail to recover to 1,000 won even once by the 12th, they are expected to be designated in succession as issues under management starting on the 13th.
Once designated as an issue under management, exiting is not easy. If the share price fails to stay at or above 1,000 won for 45 consecutive trading days during the 90 trading days after designation, the company moves straight into the delisting stage without an appeal process. As of the closing price on the 7th, 163 listed companies—131 on KOSDAQ and 32 on KOSPI—had share prices below 1,000 won.
Raising the existing market capitalization shortfall threshold is also increasing the pressure on listed companies to exit. Since the 1st of last month, the threshold has been raised from 20 billion won to 30 billion won for KOSPI and from 15 billion won to 20 billion won for KOSDAQ.
Since last month, 56 corporations—44 on KOSDAQ and 12 on KOSPI—have submitted disclosures warning of designation as issues under management due to market capitalization shortfalls. Of these, 28 have already been designated. As of the 7th, 41 KOSPI and 194 KOSDAQ listings fell short of the market cap requirement, and on KOSDAQ, 10.6% of all listed companies (1,820) are in delisting risk territory.
Listed companies facing the risk of exit are moving to prepare self-rescue measures to defend their share prices.
On the KOSPI market, JOOYONTECH(044380) and Ascendio(012170) are pursuing paid-in capital increases. SH Energy & Chemical(002360) moved to defend its share price through executive purchases of treasury shares. On the KOSDAQ market, SEJIN T.S(067770), Ryuk-Il C&S(191410) and KM Pharmaceutical(225430) have also filed disclosures on acquiring their own shares as they work to support their stock prices.