South Korea's first real estate investment trust (REIT), A-Ritz, is experiencing a significant decline as it approaches delisting, with its stock plummeting for two consecutive trading days during special trading sessions.
As of 1 p.m. on June 1, A-Ritz shares were trading at 805 won, down 293 won (26.68%) from the previous trading day. The stock had already dropped 64.92% to close at 1,098 won on the first day of special trading on May 29, and it continued to show a decline of over 20% on the following day. Compared to the last trading day before the special trading resumed on May 28, when the stock closed at 3,130 won, A-Ritz's share price has fallen by more than 74% in just two days.
A-Ritz has been undergoing delisting procedures due to failing to meet listing requirements, specifically reporting revenues of less than 5 billion won. The Korea Exchange decided to delist the company after a review by the Securities Listing Committee in August of last year.
Following the delisting decision, the company filed for a suspension of the delisting's effectiveness, temporarily halting the special trading. However, on May 21, the court dismissed this request, allowing the delisting process to resume.
Despite the ongoing delisting process, A-Ritz is pursuing a senior residence development project in Daegu. The company announced last month that it would extend the maturity of a bridge loan worth 28.56 billion won for the senior residence development project in Dongin-dong, Jung-gu, Daegu, by 24 months. Industry insiders suggest that the development project, initiated in a region with significant unsold inventory, has faced setbacks, contributing to A-Ritz's poor performance and serving as one of the reasons for its impending delisting.
Special trading sessions provide investors in stocks slated for delisting with a final opportunity to trade. Typically, there are no price limits during these sessions, leading to increased volatility in stock prices.
* This article has been translated by AI.
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