E-MART will move to provide large-scale funding to improve the financial structure of its subsidiary Shinsegae Engineering & Construction. Through a rights offering worth 500 billion won that injects both cash and real estate asset, it plans to bolster operating funds and strengthen Shinsegae Engineering & Construction's competitiveness in new orders and its mid- to long-term revenue base.
According to the Financial Supervisory Service's electronic disclosure system on the 14th, E-MART will participate in Shinsegae Engineering & Construction's rights offering through a combination of cash and in-kind contributions. The total contribution is 500 billion won. Of that, the cash contribution is 240 billion won, accounting for 48% of the total. The in-kind contribution is 260 billion won, equivalent to 52%.
The in-kind contribution will be the land and building of the Myeongil branch owned by E-MART. E-MART will contribute the real estate asset to Shinsegae Engineering & Construction, and E-MART will acquire the newly issued shares by Shinsegae Engineering & Construction.
Shinsegae Engineering & Construction plans to newly issue 10 million common shares through this rights offering. The issue price for the new shares is 50,000 won per share. E-MART, the largest shareholder, will acquire the entire amount of the newly issued shares. The payment date for the new shares is scheduled for June 25.
E-MART said it plans to simultaneously pursue the expansion of operating funds and financial stabilization at Shinsegae Engineering & Construction through this rights offering. With uncertainty in the construction market continuing, the aim is to reinforce the capital base and raise capacity for future order intake.
An E-MART official said, "This rights offering is intended to improve Shinsegae Engineering & Construction's financial structure to strengthen its capability for new orders and secure a mid- to long-term revenue base."