Alphabiz - Dawonsys to Sell Stake to Engineering Mutual Aid Association Amid Train Delivery Delays

Park Sun-soon, CEO of Dawonsys. (Photo=Yonhap News)

[Alpha Biz= Kim Jisun] Dawonsys Co., Ltd. (068240), which has faced controversy over delayed train deliveries, announced plans to sell a portion of its shares to the Engineering Mutual Aid Association.

On January 21, Dawonsys revealed it will conduct a third-party allotment of new shares to the Association. A total of 19,081,718 new shares will be issued, raising approximately KRW 41.1 billion.

In addition, Dawonsys has signed a memorandum of understanding (MOU) with the Engineering Mutual Aid Association. The MOU covers not only the current capital increase but also discussions regarding the sale of shares held by the company’s largest shareholder.

The Association will decide whether to acquire the shares after conducting due diligence. CEO Park Sun-soon currently holds a 13.71% stake in Dawonsys as the largest shareholder.

The share sale is seen as a measure to address societal concerns arising from delays in delivering electric trains and demonstrates the company’s commitment to restoring trust with stakeholders through management reforms.

Meanwhile, the Seoul Metropolitan Government has filed a lawsuit seeking damages, citing Dawonsys’ repeated delays in train deliveries. The city had advanced a total of KRW 335.6 billion to facilitate production: KRW 143.3 billion for 210 trains on Line 4, and KRW 192.3 billion for 298 trains on Lines 5 and 8.

However, Dawonsys only completed deliveries for Line 4, which itself was more than a year behind schedule, and failed to deliver any trains for Lines 5 and 8.

Alphabiz Reporter Kim Jisun(stockmk2020@alphabiz.co.kr)