Advised CJ CGV on Capital Increase worth KRW 1 Trillion
Deals & Cases
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On June 20, 2023, CJ CGV held a board of directors meeting and resolved a paid-in capital increase worth KRW 570 billion through a public offering of forfeited shares after a rights offering. CJ Corporation, which is the largest shareholder of CJ CGV, plans to participate in the rights offering (approximately KRW 60 billion worth of shares), and lead managers, which are Korea Investment & Securities, Samsung Securities and Shinhan Securities, plan to acquire the remaining shares after the public offering. In addition to the above, CJ CGV will allocate approximately KRW 450 billion worth of shares to CJ Corporation, and CJ Corporation will make an in-kind contribution of the 100% stake in CJ OliveNetworks.
Through this project, CJ CGV, by using a significant portion of the proceeds derived from the fundraising (KRW 380 billion) for the repayment of debt, will not only improve the debt-to-equity ratio from 912% to 297.7%, but will also improve the total equity to a significant degree, from KRW 356.6 billion to KRW 1146.6 billion. The capital increase will be completed by payment being made around September 14 and the issuance of new shares around September 27. Lee & Ko provided detailed advice on various complex issues arising from the simultaneous capital increase through public offering after a rights offering and a capital increase through third-party allotment by in-kind contribution.