This article was published on Dec. 23, 2024, at 5:49 p.m. on the Chosun Biz Money Move (MM) site.
DI Dongil, whose real estate asset value is estimated to exceed 2 trillion won, has decided to increase this year's cash dividends to twice the level of last year. In addition, DI Dongil is also near completion of the absorption merger of its profitable subsidiary, Dongil Aluminum. This is the result of exploring various self-help measures for value enhancement.
According to investment banking (IB) industry sources on the 23rd, DI Dongil plans to announce a cash dividend plan to pay 500 won per share soon. The settlement of account dividends for 2022 and last year was 250 won per share, and this year they have decided to double the amount.
DI Dongil first announced its stock dividend plan on the 11th. They decided to distribute 0.05 shares per common stock. This also doubled the amount of stock dividends from last year, which was 0.025 shares per share.
Initially, DI Dongil planned to pay 0.05 shares and 250 won per share this year; however, considering the recent transaction suspension, it is reported that they decided to double the dividend amount for shareholders. DI Dongil had faced a suspension of stock trading from the 21st of last month to the 11th of this month due to issues with violating accounting standards, which raised concerns about the company’s listing qualifications.
Additionally, DI Dongil is also reported to have nearly completed preparations for the absorption merger of its profitable subsidiary, Dongil Aluminum. Since this summer, Daishin Securities has been in charge of the merger process.
Dongil Aluminum, a subsidiary of DI Dongil, produces aluminum foil (cathode foil) for secondary batteries. Last year, its operating profit was 16.4 billion won, which corresponds to 2.6 times that of DI Dongil's consolidated operating profit of 6.3 billion won. In 2022, Dongil Aluminum's operating profit of 30.8 billion won accounted for 69% of DI Dongil's consolidated operating profit of 44.7 billion won.
Recently, DI Dongil made Dongil Aluminum a wholly-owned subsidiary. Originally, DI Dongil held 90.4% of Dongil Aluminum's equity, while KB Kookmin Bank held 9.4%. During the recent trading suspension, DI Dongil purchased all the shares held by Kookmin Bank. Currently, DI Dongil has 99.8% equity in Dongil Aluminum.
The transaction amount for the equity was 30.7 billion won, which means both parties valued Dongil Aluminum at about 330 billion won. However, there is no immediate need to determine the merger ratio based on this corporate value. DI Dongil is said to be contemplating how to set the merger ratio with Dongil Aluminum.
Industry insiders believe that the absorption merger of Dongil Aluminum by DI Dongil will enhance shareholder value. An IB industry official noted, “If Dongil Aluminum had been independently listed on the stock market, issues of dual listing would have arisen, but through the merger, such risks have been resolved.”
In addition, DI Dongil is reportedly considering asset revaluation of properties in Guro, Seoul, among others, with plans to sell. DI Dongil owns a property near Guro Digital Complex Station on Line 2 of the Seoul Subway, encompassing 4,098 square meters (approximately 1,239 pyeong), which has a book value of only 20 billion won but is expected to be traded in the hundreds of billions of won. It is reported that there are already potential buyers waiting. DI Dongil also owns 205,000 square meters of nationwide real estate, including 3,500 square meters in Samseong-dong, Seoul, 78,000 square meters in Incheon, and 62,500 square meters in Seocheon, South Chungcheong Province. Following asset revaluation, the estimated value is projected to exceed 2 trillion won.
In relation to this, several attempts were made to hear an official statement from DI Dongil, but contact was not established.