13 September 2021
Company Name: | W-Scope Corporation |
Stock Exchange Listing: Tokyo Stock Exchange Section 1 | |
Representative: | Won-Kun Choi, President & CEO |
Contact: | Hideo Ouchi, Director of Corporate Strategy & Planning |
TEL: | +81-(0)3-5436-7155 |
Notice of the transfer of shares in a consolidated subsidiary and the recording ofan extraordinary gain (gain on sale of shares in an affiliated company)
At a meeting of the Board of Directors held on the 9th of September 2021, the Company resolved to transfer some shares of its consolidated subsidiary W-SCOPE CHUNGJU PANT CO. ("WCP") to KB Securities Co., Ltd. and Next Level Co., Ltd. and today the number of shares to be transferred has been finalized.
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Reasons for the share transfer
The Company is in a situation where some of its bank loans (balance at the end of August 2021: approximately ¥11.6 billion) are in breach of financial covenants, and events or circumstances have arisen during the second quarter of the current fiscal year that may cause significant doubt about the Company's ability to continue as a going concern. As this has become a major barrier to the growth of the Group, which is preparing for the listing of WCP shares, the Company has decided to sell a portion of its WCP shares to improve the soundness of its financial base by repaying its bank loans in full with the proceeds of the sale and cash and deposits. The remaining fund after the repayment of the loan will be used for future capital investment. - Method of the transfer
The Company will transfer 2,206,764 shares of WCP (15.24% of the total number of shares issued) held by the Company under a share purchase agreement with cash as consideration. - Details of the Subsidiary
1. | Name of the Subsidiary | W-SCOPE CHUNGJU PLANT CO., LTD. | |||||
2. | Address | 195, Megapolis-ro,Daesowon-myeon, | |||||
Chungju-si, Chungbuk,27461, Korea | |||||||
3. | Name and title of representative | Won-Kun Choi, President & CEO | |||||
4. | Capital | KRW7,239mil (as of the end of Aug 2021) | |||||
5. | Net asset | KRW187,241mil (as of the end of Aug 2021) | |||||
6. | Total asset | KRW597,470mil (as of the end of Aug 2021) | |||||
7. | Relationship between the Company and | The Company owns 14,479,600 shares (100% ownership) of the | |||||
the Subsidiary | Subsidiary. | ||||||
8. | Financial summary of the Subsidiary for the | past three years | |||||
(KRWmil / Dec year-end) | FY2018 | FY2019 | FY2020 | ||||
Net asset | 147,223 | 193,938 | 163,358 | ||||
Total asset | 157,792 | 401,567 | 523,162 | ||||
BPS (KRW) | 21,650 | 13,393 | 11,281 | ||||
Operating profit | △10,929 | △5,055 | 9,760 | ||||
Recurring profit | △9,513 | △6,513 | △44,278 | ||||
Net profit | △9,513 | △6,513 | △31,178 | ||||
EPS (KRW) | △1,399 | △449 | △2,153 | ||||
Dividend per share (KRW) | ― | ― | ― |
4. Outline of the companies to which the shares are transferred
1. | Name of the company | KB Securities Co., Ltd. |
2. | Address | 50 Yeouinaru-ro,Yeongdeungpo-gu, Seoul, Republic of |
Korea | ||
3. | Name and title of representatives | PARK JEONG RIM, CEO |
KIM SUNG HYUN, CEO | ||
4. | Business description | Securities company |
1. | Name of the company | Next Level Co., Ltd. |
2. | Address | Republic of Korea |
3. | Business description | Equity investment company of Hanna Group |
5. Share transfer, transfer amount and status of shares held before and after the transfer
1. | Shares held by the Company before the transfer | 14,479,600 shares (100%) |
2. | Shares to be transferred | 2,206,764 shares |
∙ KB Securities CO., Ltd.:510,644 shares | ||
∙ Next Level Co., Ltd.:1,696,120 shares | ||
3. | Transfer amount | KRW166,490mil |
4. | Shares to be held by the Company after the transfer | 12,272,836 shares (84.76%) |
- Schedule
We expect to sign the share purchase agreement and complete the share transfer during the week starting 13th of September 2021, and to repay all bank borrowings in Japan by the end of September 2021. - Impact on consolidated results
As a result of this share transfer, we expect to record an extraordinary gain of approximately ¥13 billion as a gain on the sale of shares in an affiliated company in the third quarter of the fiscal year ending December 31, 2021.
The impact of the share transfer on the Company's consolidated business results has not yet been determined. In the event that there are any material information that should be publicly announced in the future, we will announce them as soon as they are determined. - Others
Depending on the outcome of the procedures with the relevant authorities, the above "5. Number of shares to be transferred, number of shares to be transferred, transfer amount and status of shares held before and after transfer", "6. Schedule" and "7. Impact on consolidated business results" may change. In such a case, we will disclose the information.
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Disclaimer
W-Scope Corporation published this content on 14 September 2021 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 14 September 2021 05:01:06 UTC.