E-mart raises 500 billion Korean won through paid-in capital increase in New World development... Initiates financial stability enhancement

E-mart, in order to strengthen its financial capacity for the development of the New World and to ease financial burdens, will carry out a paid-in capital increase of 500 billion Korean won. This is a direct investment from the parent company to adjust the subsidiary’s financial structure. In the context of the overall challenging financing environment in the construction industry, this move is interpreted as reinforcing the business foundation through internal group support.

According to the electronic public notice system of the Financial Supervisory Service on the 14th, E-mart will participate in the paid-in capital increase of New World Construction using both cash and in-kind contributions. Out of the total 500 billion Korean won, cash contributions will amount to 240 billion won, accounting for 48%; in-kind contributions will be 260 billion won, accounting for 52%. A paid-in capital increase is a method of raising funds by issuing new shares, and this time, it features a structure where assets are contributed along with cash.

The in-kind contribution involves land and buildings owned by E-mart in the Mingri Store. E-mart will transfer these assets to New World Construction, and in return, will receive newly issued shares of New World Construction. New World Construction will issue 10 million common shares at a price of 50k Korean won per share. The new shares will be fully subscribed by the major shareholder, E-mart. The payment deadline is June 25. In fact, rather than attracting external investors, this move is more strongly characterized as support from the largest shareholder to fund expansion.

The background for E-mart’s decision is based on the assessment that improving the financial stability of New World Construction will enhance its ability to secure future projects. For construction companies, financial soundness is generally a key factor in bid competitions; capital expansion helps reduce borrowing burdens and increase external trust. E-mart officials also explained that this paid-in capital increase aims to improve New World Construction’s financial structure, strengthen its ability to secure new orders, and build a foundation for medium- to long-term revenue.

In the market, this move is seen not only as simple support for a subsidiary but also as a reallocation of assets at the group level. As a trading company, E-mart transferring its real estate assets to the construction subsidiary simultaneously promotes capital expansion and asset utilization. Whether this trend will truly lead to improved performance and increased order intake in the future will determine differing evaluations. If the improvement in financial structure can restore New World Construction’s competitiveness, this capital increase could go beyond short-term support and serve as an opportunity for medium- to long-term business restructuring.