The holding company of the Dongkuk Steel Group held an extraordinary general meeting on June 24 at its headquarters in Ferum Tower, Jung-gu, Seoul, where it approved the agenda item regarding the reduction of reserves and the transfer of retained earnings as originally proposed.
Through this meeting, Dongkuk Holdings completed a five-month capital restructuring process, ensuring sustainable dividend funds from a long-term perspective. Despite the downturn in the steel industry, the company expressed a firm commitment to enhancing shareholder value. Shareholders will also benefit from tax advantages related to the reduced dividends.
The key aspect of this restructuring is the conversion of previously non-distributable reserves into distributable funds. With the approval of the agenda, Dongkuk Holdings converted 480.8 billion won in non-distributable capital reserves and 100.3 billion won in profit reserves, totaling 581.1 billion won, into retained earnings, making these funds available for future shareholder returns.
This amount is the maximum allowed under the Commercial Act. Dongkuk Holdings converted the entire excess amount into funds with shareholder consent, in accordance with Article 461-2 of the Commercial Act, which allows for the reduction of reserves exceeding 1.5 times the capital stock. The company also secured tax benefits related to the reduced dividends.
With the approval of this agenda, Dongkuk Holdings has completed its four-phase capital restructuring initiated in February. The phases included share buybacks (Phase 1), par value reduction (Phase 2), stock splits (Phase 3) to enhance liquidity and accessibility for shareholders, and finally, the transfer of the entire excess amount to retained earnings (Phase 4), preserving shareholder value without altering total capital.
Future dividends are expected to increase. The enhanced minimum dividend criteria established in February will be applied. Additionally, Dongkuk Holdings plans to continuously review further shareholder return measures, including dividend increases, in line with improved performance and cash generation.
Having completed its capital restructuring, Dongkuk Holdings will also focus on its primary role of discovering new growth drivers for the group. Earlier, during the regular shareholders' meeting in March, the company indicated it was considering establishing joint ventures, pursuing mergers and acquisitions, and forming strategic alliances in promising sectors this year.
* This article has been translated by AI.
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