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[Alpha Biz=(Chicago) Reporter Kim Jisun] Shinsegae Group announced on the 14th that Shinsegae Engineering & Construction has decided to merge with Shinsegae Youngrangho Resort to strengthen financial stability.
Shinsegae Construction announced that it decided to merge through the board of directors.
The surviving company is Shinsegae Construction and Shinsegae Yeongrangho Resort is extinguished.
Shinsegae Engineering & Construction explained that it expects the decision to improve its financial structure by expanding capital worth about 65 billion won and securing stable liquidity, strengthening corporate competitiveness.
The merger is expected to lower the debt ratio from 470% to 356% in the third quarter.
E-Mart, the largest shareholder of the merged corporation and the merged corporation, currently holds 42.7% of Shinsegae Engineering & Construction and 100% of Shinsegae Youngrangho Resort, respectively.
Once the merger is completed, E-Mart's stake in Shinsegae Engineering & Construction will rise from 42.7% to 70.46%.
An extraordinary shareholders' meeting to approve the merger will be held on the 22nd of next month, and the merger date will be Jan. 25 next year.
E-Mart's third-quarter consolidated operating profit fell 22.6% from the same period last year to 77.9 billion won, as Shinsegae Engineering & Construction's operating profit fell 55.1 billion won from last year due to high interest rates and higher raw material prices.
Shinsegae Engineering & Construction posted an operating profit of 6.55 billion won in the third quarter of last year, but turned to a deficit in the third quarter of this year, with operating losses of more than 48.5 billion won.
Alphabiz Reporter Kim Jisun(stockmk2020@alphabiz.co.kr)
