Jay Y. Lee volunteers to help engineering unitSamsung Electronics Vice Chairman and heir apparent to Samsung Group Jay Y. Lee has decided to pitch in to save the struggling Samsung Engineering.
According to Samsung Group on Monday, Lee will purchase up to 300 billion won of newly issued shares by Samsung Engineering that fail to be snapped up by existing shareholders.
Lee will purchase the shares under the same conditions as other shareholders.
Samsung said Lee was participating in the shares issuance to minimize the difficulty that Samsung Engineering is facing as well as any damages to existing shareholders.
“The terms will be the same as for other investors,” Samsung said in a statement. “The purpose isn’t for investment speculation or to secure control.”
On the same day, Samsung Engineering held a board meeting at which it decided to issue 1.2 trillion won of shares to raise capital. The engineering affiliate decided to increase the limits of existing shares.
The 156 million newly issued shares will be offered at 7,700 won per share. The 1.2 trillion won worth of shares will be sold on March 2, 2016 and any shares not bought by existing shareholders will be sold to the general public ? and Lee.
Lee wants to save the engineering affiliate, which is on the verge of being delisted from the Korean stock market due to a massive 400 billion won capital impairment.
After releasing its third quarter results in October, the company announced its plans for a 1.2 trillion won right issuance. Its largest stakeholder Samsung SDI, which holds a 13.1 percent stake in the engineering affiliate, and its second-largest stakeholder Samsung C&T, with a 7.81 percent stake, has already showed a willingness to participate in the share issuance. In the third quarter, Samsung Engineering reported an operating loss of over 1.5 trillion won, while revenue was 856.9 billion won, a 61.2 percent drop from a year ago. Net losses amounted to 1.33 trillion won.
BY LEE HO-JEONG [firstname.lastname@example.org]
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