SEOUL, KOREA - Hankook Tire Worldwide, the holding company of Hankook Tire, will increase its capital by issuing capital stock for noncash assets. This is intended to make Hankook Tire as its subsidiary. Through the capital increase, Hankook Tire chairman Cho Yang-Rai and his family will be able to strengthen their control over the company by doubling their stake in the holding company.
On May 21, Hankook Tire Worldwide said it held a board of directors meeting the previous day and voted to increase its capital by 1,595 billion won in efforts to turn the corporate structure into a holding company.
On the same day, the share prices of Hankook Tire Worldwide and Hankook Tire showed mixed results. Due to the share value dilution, Hankook Tire Worldwide's price fell 8.47 percent to close at 18,900 won while that for Hankook Tire gained 0.95 percent to 53,300 won.
Shin Jung-gwan, analyst with KB Investment & Securities, said, "Even after Worldwide takes over Hankook Tire as a subsidiary, there is little to expect from the change comparing to other holding companies. It would be more attractive to investors if Worldwide owns Hankook Tire directly rather than indirectly through a holding company structure."
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