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[Alpha Biz=(Chicago) Reporter Kim Jisun] Shares of CJ Group affiliates plunged en masse on news that CJ CGV will carry out a paid-in capital increase equivalent to its market capitalization.
According to Market Point on the 21st, CJ CGV (079160) closed at 11,440 won, down 3,060 won (21.10%) from the previous trading day.
CJ Group was also hit directly. CJ, the holding company of CGV, fell 4.99%, CJ CheilJedang 5.31%, CJ ENM 5.50%, and CJ Freshway (051500) 1.69%.
The sharp drop in CJ CGV shares is due to the inevitable dilution of shareholders' equity value due to paid-in capital increase. The CJ CGV held a board meeting the previous day and decided to increase its capital by 570 billion won. It is equivalent to the market capitalization of 546 billion won based on the closing price of the day.
74.7 million new shares will be issued at 7,630 won per share, about half of the previous day's closing price of 14,500 won. As a result, the total number of shares issued by CJ CGV will increase from 47,728,537 to 122,428,537. The paid-in capital increase will be carried out through a general public offering of disqualified shares after the allocation of shareholders.
CJ, the holding company, plans to participate in the paid-in capital increase allocated to shareholders by about 60 billion won, and separately, it plans to invest its stake in CJ Olive Networks, a subsidiary, in kind through a third-party paid-in capital increase.
CJ CGV plans to stabilize its financial structure and strengthen its future business by expanding capital.
Alphabiz Reporter Kim Jisun(stockmk2020@alphabiz.co.kr)
