SEOUL, June 5 (Korea Bizwire) – Samsung Everland Inc., a de facto holding company for the whole Samsung Group affiliates, announced a plan for public offering following the footsteps of Samsung SDS. It is likely the IPO would be in the first quarter next year. On June 3, the company held a board of directors meeting and approved the IPO proposal.
Yoon Ju-hwa, Samsung Everland president, said, “This is intended to raise the competitiveness of businesses that were restructured last year by securing financial resources. We will step up our effort to become a global fashion and services company.”
Analysts see the latest announcement as part of the group’s succession plan to give more power to the current chairman’s three children, including Lee Jae-yong, Samsung Electronics vice chairman, Lee Bu-jin, Hotel Shilla president, and Lee Seo-hyun, Samsung Everland president.
Samsung Group’s cross-shareholding structure begins with Samsung Everland, followed by Samsung Life, Samsung Electronics, and other affiliate companies. In most cases, Samsung Electronics owns shares of manufacturing companies while Samsung Life holds financial services unit stakes.
Currently Samsung Group chairman Lee Kun-hee owns a 3.72-percent stake in the theme park operator. His three children including Jae-yong, Bu-jin, and Seo-hyun are holding stakes of 25.1 percent, 8.37 percent, and 8.37 percent, respectively. In all, the Lee family owns 46 percent of the Samsung Everland stake. KCC also owns a 17-percent stake in the company.
Following the IPO announcement, it is expected the succession to the third-generation family members would be accelerated. Once the Samsung Everland shares are publicly listed, the son and two daughters will be able to secure cash to pay for inheritance taxes. Given the value of the chairman’s stockholdings is estimated at 11 trillion won, the inheritance tax bill for them would be in excess of 5 trillion won.
Others suggested the group may try to strengthen the children’s governance power by purchasing stakes in other affiliates with the money earned from the IPO. For example, the stake in Samsung Electronics held by the chairman’s family falls short of 17 percent. The largest shareholder in the company is the National Pension Service with 7.7 percent.
Samsung Everland has stepped up its governance structure reform since last year in order to simplify the complicated group-wide cross-shareholding structure. In October last year, it took in the fashion business unit from Cheil Industries with Samsung SDI and Cheil Industries merging with each other.
Written Sean Chung (firstname.lastname@example.org)