Seoul-based Korea Industry & Technology Times reports that Hankook Tire’s holding company, Hankook Tire Worldwide, will increase its capital by issuing capital stock for noncash assets.
This is being done in order to make Hankook Tire Co. its full subsidiary, the journal explained. Through the capital increase, Hankook Tire chairman Cho Yang-Rai and his family will be able to strengthen their control over the company by doubling their stake in the holding company.
On May 20, Hankook Tire Worldwide held a board of directors meeting and voted to increase its capital by 1,595 billion won in an effort to turn the corporate structure into a holding company. Following the announcement of this meeting, Hankook Tire Worldwide and Hankook Tire share prices showed mixed results. Due to the share value dilution, Hankook Tire Worldwide’s stock price reportedly fell 8.47% to close at 18,900 won, while that for Hankook Tire gained 0.95% to 53,300 won.
Shin Jung-Gwan, analyst with KB Investment & Securities, was quoted by Korea Industry & Technology Times as saying: "Even after Hankook Worldwide takes over Hankook Tire as a subsidiary, there is little to expect from the change comparing to other holding companies. It would be more attractive to investors if Worldwide owns Hankook Tire directly rather than indirectly through a holding company structure." (Tyres & Accessories)
