[Alpha Biz= Reporter Kim Youngtaek] NXC is reportedly considering canceling ₩666.2 billion worth of shares recently acquired from the family of the late Nexon founder, Kim Jung-ju. On August 21, a senior official from NXC told Alpha Economy, "We are reviewing the possibility of canceling the treasury shares acquired in this transaction."

The day before, NXC disclosed that it had purchased 61,746 shares from Chairwoman Yoo Jung-hyun (valued at ₩320.3 billion) and 31,771 shares each from her two children, Kim Jung-min and Kim Jung-yoon (valued at ₩164.8 billion each). Additionally, NXC acquired 3,122 shares of WiseKids, jointly owned by Jung-min and Jung-yoon, for ₩16.1 billion, bringing the total transaction to ₩666.2 billion.

The potential cancellation of these treasury shares is seen as a move to increase the earnings per share (EPS) and enhance shareholder value, as reducing the number of shares outstanding alleviates supply pressure.

Previously, before April 2012, non-listed companies were prohibited from buying back their own shares due to concerns that this could lead to unfair corporate governance and violate capital maintenance principles. However, legal revisions have since made it possible for non-listed companies like NXC to repurchase their shares. Nonetheless, the valuation of shares in non-listed companies can be challenging and poses the risk of overvaluation.

A tax expert mentioned to Alpha Biz, "When a non-listed company buys back and cancels the shares of its major shareholders, it can result in tax-saving benefits. In NXC's case, this move could potentially enhance shareholder value while also providing tax benefits to the controlling family through deemed dividends."

 

 

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