Cosmo Group, part of the broader GS Group, is accelerating a governance overhaul centered on Chairman Huh Kyung-soo, using capital transactions such as issuing convertible bonds (CB) as a catalyst.
While the group's future—its secondary battery materials business—has seen Huh strengthen control through the holding company, he chose a two-track strategy of handing the lower-profit distribution business to his children. The move is seen as shoring up the holding company's financial soundness while testing his children's management skills away from the group's core.
◇ Shedding the "money pit" distribution arm and reshaping into a "pure holding company"
According to the Financial Supervisory Service and the investment banking (IB) sector on the 9th, Cosmo AM&T, a listed company within Cosmo Group, issued CBs worth 120 billion won last month and laid plans to invest in domestic and overseas cathode materials. Cathode materials are key components that determine a battery's capacity, output, lifespan, and safety, and they directly tie into Cosmo AM&T's secondary battery materials business.
Cosmo & Company, the holding company, is also said to be planning to raise funds through a domestic private equity fund (PEF) manager. Once the financing is complete, Cosmo & Company will convert into a pure holding company, channel some of the funds into Cosmo AM&T to cement governance control, and Cosmo AM&T intends to use the secured cash to weather the temporarily slowing growth in the secondary battery materials market.
Huh, the eldest son of Huh Shin-koo, honorary chairman of GS Retail, split from GS Group in 2015 and has led Cosmo Group. Huh holds 100% equity in Cosmo & Company, the group's holding company. Huh sits at the top of a governance chain that runs Cosmo & Company ⟶ COSMO Chemical ⟶ Cosmo AM&T.
The latest governance reshuffle at Cosmo Group shows a strategy of "selection and concentration." Cosmo & Company, the holding company wholly owned by Huh, had long been an abnormal structure. Despite being a holding company with subsidiaries, it directly ran distribution businesses for home appliances and sporting goods after mergers with firms such as Jeongsan TVL in the past. In particular, distribution of the global home appliance brand "SharkNinja," rolled out ambitiously since Apr. 2023, became a sore spot. Because of SharkNinja, Cosmo & Company's operating loss widened to 14.3 billion won in 2024 from about 11.1 billion won in 2023.
After failing to find success with those businesses, the company is seeking to convert into a pure holding company on the back of this capital transaction. Home appliance distribution and wholesale/retail of sporting goods offer thin margins and heavy inventory burdens. Given it already owns core affiliates like COSMO Chemical and Cosmo AM&T, the holding company had been saddled with a business that offered little practical benefit.
Becoming a pure holding company also strengthens Huh's control. If the holding company does not operate businesses directly, operating risks disperse to subsidiaries, and the holding company can focus solely on investment and equity management. Because fluctuations in the holding company's results do not translate directly into the group's overall value or risk, governance stability improves.
◇ Assigning noncore units to the children rather than a "safe haven"
A notable point in this reshuffle is the standing of Huh's children (Seon-hong, Su-yeon, and Ji-yeon). Instead of the battery business on which the group has staked its future, they are taking over the "distribution business" the holding company is abandoning.
At the center is "D2S1 Partners," which they own. The company—60% held by eldest son Huh Seon-hong and the rest by the two daughters—is a management consulting firm but effectively serves as the parent of Joyang Logistics International, which handles the group's logistics. Distribution businesses such as SharkNinja, which Cosmo & Company is exiting, are highly likely to be transferred to Joyang Logistics International.
A significant portion of its performance depends on affiliates. D2S1 Partners posted operating losses of 6.91 million won and 28.37 million won in 2023 and 2024, respectively, with no revenue in either year. However, because the roughly 60 billion won in annual revenue and about 2 billion won in operating profit at Joyang Logistics International were reflected as equity-method gains, it recorded net profit on an accounting basis. Equity-method gains reflect a subsidiary's earnings in the parent's results in proportion to the equity stake.
The market views this as a "succession-prep restructuring" aimed at giving the children managerial training through noncore businesses. A mergers and acquisitions (M&A) attorney said, "It's a structure that separates the children from the most expensive assets and the most sensitive decision-making," adding, "It appears intended to minimize potential conflicts of interest during the succession process."
With the secondary battery market catching its breath amid an electric-vehicle chasm (a temporary demand slowdown), Cosmo Group is preparing its "next step" through internal housekeeping via a governance overhaul. Attention is on whether Chairman Huh Kyung-soo's "two-track gambit" can capture both the group's leap forward and succession.