Cheil Worldwide will burn all of its treasury shares and initiate an additional buyback. The company plans to eliminate approximately 280 billion won worth of existing treasury shares and acquire an additional 140 billion won worth within a year, enhancing shareholder returns.
On September 30, Cheil Worldwide held a board meeting and approved the plan for the cancellation of its treasury shares and the additional buyback.
The shares to be burned include 13,762,500 treasury shares, which account for about 12% of the total issued shares, valued at approximately 280 billion won. The cancellation is scheduled for November 15.
Cheil Worldwide will also proceed with additional purchases. Over the next year, the company plans to acquire a total of 140 billion won worth of treasury shares, all of which will be burned. Initially, it will buy back 40 billion won worth of shares from October 1 to December 30.
In its business report released in March, Cheil Worldwide stated that it had no plans for separate acquisitions or disposals of treasury shares beyond utilizing its existing holdings. However, it later reassessed its shareholder return policy, leading to the decision to cancel all existing shares and initiate additional buybacks. This marks a shift in policy from merely holding treasury shares to actively reducing the number of shares.
The cancellation of treasury shares effectively reduces the total number of issued shares, thereby increasing the per-share value and ownership percentage for existing shareholders. Cheil Worldwide aims to enhance shareholder value and improve capital efficiency in the medium to long term through this measure.
Industry observers note that the scale of this cancellation, which represents about 12% of the total issued shares, has a more direct impact on per-share value than simply increasing dividends. By eliminating all existing treasury shares and committing to an additional 140 billion won in buybacks and cancellations within a year, Cheil Worldwide's shareholder return policy has been strengthened, shifting focus from 'holding' to 'cancellation.'
* This article has been translated by AI.
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