KG Mobility (hereinafter referred to as KGM) announced on the 13th that it has decided to carry out a capital reduction through a par value adjustment method aimed at improving its financial structure and is accelerating its management normalization.
KGM has decided to implement a capital reduction by lowering the par value of 196,404,254 common shares from 5,000 won to 1,000 won for the purpose of covering accumulated losses during its board meeting on the 10th, thereby laying the groundwork for increasing capital efficiency and achieving financial stability.
As a result of the capital reduction decision, KGM's capital will decrease by 80% from the existing 982.02127 billion won to 196.44254 billion won after the reduction, and the total number of shares and total capital will not change as it is only a reduction of the par value.
This capital reduction decision is aimed at addressing accumulated losses and improving the financial structure, and through this reduction, it will be possible to cover the accumulated loss of 1.1325 trillion won, which could not be resolved when Ssangyong Motor Corporation went through its rehabilitation process in the past.
In particular, if the accumulated losses are resolved and consistent performance improvement occurs, it is expected that dividends will ultimately be possible when distributable profits are realized.
Additionally, the gain from the capital reduction amounting to 785.61701 billion won will be used entirely to cover the accumulated losses. Since accumulated losses have a long-term negative impact on finances, this capital reduction enables the establishment of a preemptively stable financial structure.
If approved at the shareholders' meeting on March 26, KGM will have a stock trading suspension period from April 10 to May 8. The record date for the reduction is April 11, and new shares are expected to be listed on May 9.
KGM recorded separate revenue of 3.7825 trillion won and an operating profit of 12.3 billion won last year, achieving operating profit for two consecutive years in 2023 and 2024. This is the first time in 20 years since 2004. However, KGM is still being assessed by external stakeholders as needing prompt management normalization due to accumulated losses.
In response to the market reaction, KGM is proactively launching its first electric pickup truck, "MUSSO EV," and "Taurus Hybrid," among other initiatives, and plans to accelerate management normalization through expanded sales as well as improving its financial structure with the introduction of new models in its eco-friendly vehicle lineup.
A KGM official noted, "This capital reduction decision is aimed at covering accumulated losses and improving the financial structure, and it is expected to allow for credit enhancements and investment attraction through securing financial soundness in the future," emphasizing that, "We will accelerate the expansion of our eco-friendly vehicle lineup and grow into a future mobility corporation."
[OSEN = Journalist Kang Hee-soo]