Must Asset Management raised issues again regarding the spin-off led by PharmaResearch. Specifically, it demanded that CVC Capital, the second-largest shareholder of PharmaResearch, disclose specific conditions related to the equity repayment rights.
Must Asset Management stated in a piece titled 'Must Asset Management's second letter on the decision to partition PharmaResearch,' signed by CEO Kim Do-yong, that it holds 1.2% equity in PharmaResearch.
Earlier, PharmaResearch announced that it would split the company into a holding company tentatively named 'PharmaResearch Holdings' and a newly established company tentatively named 'PharmaResearch' that will operate the existing aesthetic business. Must Asset Management is continuing to raise concerns, asserting that the structure is unfavorable to minority shareholders.
Must Asset Management pointed out that CVC Capital holds equity repayment rights for PharmaResearch Holdings based on a contract with the majority shareholder. The repayment rights allow a shareholder to sell their shares back to the company for cash.
From CVC Capital's perspective, exercising the repayment rights when PharmaResearch Holdings' stock price drops could help mitigate losses. Ultimately, Must Asset Management claims that this could reduce the cash reserves of PharmaResearch Holdings and harm minority shareholders.
Must Asset Management demanded that CVC Capital provide detailed information about the repayment terms and plans by July 1.
CVC Capital holds 10.06% equity in PharmaResearch under the name 'Polish Company.' It has entered into an agreement with the majority shareholder for joint exercise of voting rights, and two representatives from CVC Capital are participating in PharmaResearch's board of directors.
Must Asset Management also reiterated concerns regarding the ratio and method of the spin-off. Must Asset Management questioned, 'Aside from the fact that it can significantly enhance the corporate control of the majority shareholder without using their personal funds, does a holding company structure through spin-off and physical contributions offer any advantages over tangible divisions that do not have duplicate listings for subsidiaries?' It also requested additional responses from PharmaResearch by July 1.