Dongyang, a subsidiary of Eugene Group, is taking steps to enhance its corporate value through a significant stock buyback and consolidation.
On June 2, Dongyang held a board meeting and resolved to cancel a total of 24,611,979 shares, including 24,439,999 common shares and 171,980 preferred shares. The cancellation amounts to approximately 719 billion won based on book value, representing 10.26% of the total issued shares.
This cancellation is expected to provide shareholder returns, as it involves a permanent buyback that will not re-enter the market.
With the reduction in the number of issued shares, the value per share could increase based on the same corporate value and profits. A 10.26% decrease in the total number of shares could lead to an approximate 11% improvement in per-share metrics.
Dongyang aims to clarify the direction of its stock buyback and continues to review its capital policy with a focus on maximizing shareholder value.
In addition to the stock cancellation, the company plans to implement a 2-for-1 stock consolidation. This measure is intended to reduce the number of issued shares and normalize the trading price per share, thereby alleviating undervaluation perceptions and enhancing market confidence. The final decision will be made at an extraordinary shareholders' meeting scheduled for June 22.
A Dongyang representative stated, "This stock cancellation demonstrates the company's strong commitment to enhancing shareholder value. By permanently canceling more than 10% of the total issued shares and consolidating stocks, we aim to increase the predictability of our capital policy and strengthen our investor relations activities to ensure that our corporate value is properly recognized in the market."
* This article has been translated by AI.
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