Daelim Industrial Co., a major South Korean builder, is splitting into three firms — a holding company and two affiliates — as the company seeks to enhance corporate governance and focus its resources on each unit’s specialty business area.
At its board meeting on Sept. 10, Daelim Industrial approved a plan to divide the current company into a holding company, tentatively named DL Co., and a construction firm, called DL E&C. Daelim Industrial’s existing shareholders will be given new shares in each company at a ratio of 44% to 56%. The two new companies will be listed on the local bourse.
Daelim Industrial will also spin off its petrochemical business into a new company, DL Chemical, which will be wholly owned by the holding company, DL Co.
The split plan is subject to approval at Daelim Industrial’s shareholder meeting scheduled for Dec. 4, with a view to launching the three firms on Jan. 1, 2021.
“By transforming our company into a holding company system, we want to establish a transparent corporate governance structure,” said a Daelim Industrial official. “We also believe, through the split, each of the three companies can focus on their own specialty area.”
Daelim Industrial, the parent of the Daelim Group, South Korea’s 18th-largest conglomerate, has been criticized for not creating synergy in its construction and petrochemical divisions, whose different business cycles have limited its growth.
Other subsidiaries of the Daelim Group include another petrochemical company, Yeochun NCC Co., and Glad Hotel & Resorts.
Shares of Daelim Industrial finished down 2.2% at 92,800 won on Thursday.
By Jin-Soo Kim
<Edited by In-Soo Nam>