Korea / Special Sits, Pairs, Index Rebalancing, Clepsydra Capital

Sanghyun Park

Korea / Special Sits, Pairs, Index Rebalancing

Event-Driven

<p>Daelim Industrial announces a three-way demerger plan.</p><p>It is part of the long-planned and anticipated holding company conversion reorganization.</p><p>First, Daelim Industrial undergoes an equity spin-off at a split ratio of 0.44 to 0.56. As a result, we will have two separate entities: 1. DL Corp (holding company) and 2. DL E&amp;C (operating company - construction).</p><p>Second, Daelim then spins out the petrochemical unit in the form of physical division. This newly spun-out company, DL Chemical, will become a wholly-owned subsidiary of DL Corp.</p><table class="table table-striped">
<colgroup>
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<col width="200">
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<tbody>
<tr><td colspan="4" rowspan="1" data-sheets-value='{"1":2,"2":"Overview"}'>Overview</td></tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Name"}'>Name</td>
<td colspan="3" rowspan="1" style="text-align: right;" data-sheets-value='{"1":2,"2":"Daelim Industrial Co Ltd"}' data-sheets-formula='=googlefinance(R[1]C[0], "name")'>Daelim Industrial Co Ltd</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Ticker"}'>Ticker</td>
<td colspan="3" rowspan="1" style="text-align: right;" data-sheets-value='{"1":2,"2":"000210"}' data-sheets-numberformat='{"1":3,"2":"0.00%","3":1}' data-sheets-formula='="000210"'>000210</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Surviving"}'><strong>Surviving</strong></td>
<td colspan="3" rowspan="1" style="text-align: right;" data-sheets-value='{"1":2,"2":"DL Corp"}'><strong>DL Corp</strong></td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":" - Ticker"}'>- Ticker</td>
<td colspan="3" rowspan="1" style="text-align: right;" data-sheets-value='{"1":2,"2":"000210"}' data-sheets-numberformat='{"1":3,"2":"0.00%","3":1}' data-sheets-formula="=R[-2]C[0]">000210</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":" - Bourse"}'>- Bourse</td>
<td colspan="3" rowspan="1" style="text-align: right;" data-sheets-value='{"1":2,"2":"KOSPI"}' data-sheets-numberformat='{"1":3,"2":"0.00%","3":1}'>KOSPI</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":" - Ratio"}'>- Ratio</td>
<td colspan="3" rowspan="1" style="text-align: right;" data-sheets-value='{"1":3,"3":0.4437144}' data-sheets-numberformat='{"1":3,"2":"0.00000%","3":1}'>44.37144%</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":" - Type"}'>- Type</td>
<td colspan="3" rowspan="1" style="text-align: right;" data-sheets-value='{"1":2,"2":"Holding company"}'>Holding company</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":" - Business"}'>- Business</td>
<td colspan="3" rowspan="1" style="text-align: right;" data-sheets-value='{"1":2,"2":"Subsidiary management &amp; investment"}'>Subsidiary management &amp; investment</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":" - Stock split"}'>- Stock split</td>
<td colspan="3" rowspan="1" style="text-align: right;" data-sheets-value='{"1":3,"3":1}' data-sheets-numberformat='{"1":2,"2":"#,##0.0"}'>1.0</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"New 1"}'><strong>New 1</strong></td>
<td colspan="3" rowspan="1" style="text-align: right;" data-sheets-value='{"1":2,"2":"DL E&amp;C Corp"}'><strong>DL E&amp;C Corp</strong></td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":" - Type"}'>- Type</td>
<td colspan="3" rowspan="1" style="text-align: right;" data-sheets-value='{"1":2,"2":"Equity spin-off"}'>Equity spin-off</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":" - Ticker"}'>- Ticker</td>
<td colspan="3" rowspan="1" style="text-align: right;" data-sheets-value='{"1":2,"2":"TBA"}' data-sheets-numberformat='{"1":3,"2":"0.00%","3":1}'>TBA</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":" - Bourse"}'>- Bourse</td>
<td colspan="3" rowspan="1" style="text-align: right;" data-sheets-value='{"1":2,"2":"KOSPI"}' data-sheets-numberformat='{"1":3,"2":"0.00%","3":1}'>KOSPI</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":" - Ratio"}'>- Ratio</td>
<td colspan="3" rowspan="1" style="text-align: right;" data-sheets-value='{"1":3,"3":0.5562856}' data-sheets-numberformat='{"1":3,"2":"0.00000%","3":1}'>55.62856%</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":" - Type"}'>- Type</td>
<td colspan="3" rowspan="1" style="text-align: right;" data-sheets-value='{"1":2,"2":"Operating company"}'>Operating company</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":" - Business"}'>- Business</td>
<td colspan="3" rowspan="1" style="text-align: right;" data-sheets-value='{"1":2,"2":"Construction"}'>Construction</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":" - Stock split"}'>- Stock split</td>
<td colspan="3" rowspan="1" style="text-align: right;" data-sheets-value='{"1":3,"3":1}' data-sheets-numberformat='{"1":2,"2":"#,##0.0"}'>1.0</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"New 2"}'><strong>New 2</strong></td>
<td colspan="3" rowspan="1" style="text-align: right;" data-sheets-value='{"1":2,"2":"DL Chemical Corp"}'><strong>DL Chemical Corp</strong></td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":" - Type"}'>- Type</td>
<td colspan="3" rowspan="1" style="text-align: right;" data-sheets-value='{"1":2,"2":"Spin-out (physical division)"}'>Spin-out (physical division)</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":" - Ticker"}'>- Ticker</td>
<td colspan="3" rowspan="1" style="text-align: right;" data-sheets-value='{"1":2,"2":"N/A"}'>N/A</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":" - Bourse"}'>- Bourse</td>
<td colspan="3" rowspan="1" style="text-align: right;" data-sheets-value='{"1":2,"2":"N/A"}'>N/A</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":" - Ratio"}'>- Ratio</td>
<td colspan="3" rowspan="1" style="text-align: right;" data-sheets-value='{"1":2,"2":"N/A"}'>N/A</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":" - Type"}'>- Type</td>
<td colspan="3" rowspan="1" style="text-align: right;" data-sheets-value='{"1":2,"2":"Operating company"}'>Operating company</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":" - Business"}'>- Business</td>
<td colspan="3" rowspan="1" style="text-align: right;" data-sheets-value='{"1":2,"2":"Petro chemical"}'>Petrochemical</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":" - Stock split"}'>- Stock split</td>
<td colspan="3" rowspan="1" style="text-align: right;" data-sheets-value='{"1":3,"3":1}' data-sheets-numberformat='{"1":2,"2":"#,##0.0"}'>1.0</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Stock purchase"}'>Stock purchase</td>
<td colspan="3" rowspan="1" style="text-align: right;" data-sheets-value='{"1":2,"2":"N/A"}' data-sheets-numberformat='{"1":2,"2":"#,##0.0000000","3":1}'>N/A</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Banker"}'>Banker</td>
<td colspan="3" rowspan="1" style="text-align: right;" data-sheets-value='{"1":2,"2":"N/A"}' data-sheets-numberformat='{"1":2,"2":"#,##0.0000000","3":1}'>N/A</td>
</tr>
<tr><td colspan="4" rowspan="1" data-sheets-value='{"1":2,"2":"Source: DART"}' data-sheets-numberformat='{"1":2,"2":"#,##0","3":1}'><em>Source: DART</em></td></tr>
</tbody>
</table><table class="table table-striped">
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<col width="300">
<col width="200">
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</colgroup>
<tbody>
<tr>
<td data-sheets-value='{"1":2,"2":"Financials - 3Q19 (₩ bil)"}'>Financials - 3Q19 (₩ bil)</td>
<td style="text-align: right;" data-sheets-formula="=R[-67]C[-1]" data-sheets-value='{"1":2,"2":"Surviving"}'>Surviving</td>
<td style="text-align: right;" data-sheets-formula="=R[-60]C[-2]" data-sheets-value='{"1":2,"2":"New 1"}'>New 1</td>
<td style="text-align: right;" data-sheets-formula="=R[-52]C[-3]" data-sheets-value='{"1":2,"2":"New 2"}'>New 2</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Name"}'>Name</td>
<td style="text-align: right;" data-sheets-formula="=R[-68]C[0]" data-sheets-numberformat='{"1":2,"2":"#,##0.0"}' data-sheets-value='{"1":2,"2":"DL Corp"}'>DL Corp</td>
<td style="text-align: right;" data-sheets-formula="=R[-61]C[-1]" data-sheets-numberformat='{"1":2,"2":"#,##0.0"}' data-sheets-value='{"1":2,"2":"DL E&amp;C Corp"}'>DL E&amp;C Corp</td>
<td style="text-align: right;" data-sheets-formula="=R[-53]C[-2]" data-sheets-value='{"1":2,"2":"DL Chemical Corp"}'>DL Chemical Corp</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Split type"}'>Split type</td>
<td style="text-align: right;" data-sheets-numberformat='{"1":2,"2":"#,##0.0"}' data-sheets-value='{"1":2,"2":"-"}'>-</td>
<td style="text-align: right;" data-sheets-formula="=R[-61]C[-1]" data-sheets-numberformat='{"1":2,"2":"#,##0.0"}' data-sheets-value='{"1":2,"2":"Equity spin-off"}'>Equity spin-off</td>
<td style="text-align: right;" data-sheets-formula="=R[-53]C[-2]" data-sheets-value='{"1":2,"2":"Spin-out (physical division)"}'>Spin-out (physical division)</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Total assets"}'>Total assets</td>
<td style="text-align: right;" data-sheets-numberformat='{"1":2,"2":"#,##0.0"}' data-sheets-value='{"1":3,"3":3292.553730996}'>3,292.6</td>
<td style="text-align: right;" data-sheets-numberformat='{"1":2,"2":"#,##0.0"}' data-sheets-value='{"1":3,"3":6339.708505598}'>6,339.7</td>
<td style="text-align: right;" data-sheets-numberformat='{"1":2,"2":"#,##0.0"}' data-sheets-value='{"1":3,"3":1385.835086962}'>1,385.8</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Total liabilities"}'>Total liabilities</td>
<td style="text-align: right;" data-sheets-numberformat='{"1":2,"2":"#,##0.0"}' data-sheets-value='{"1":3,"3":718.549764572}'>718.5</td>
<td style="text-align: right;" data-sheets-numberformat='{"1":2,"2":"#,##0.0"}' data-sheets-value='{"1":3,"3":3112.674847365}'>3,112.7</td>
<td style="text-align: right;" data-sheets-numberformat='{"1":2,"2":"#,##0.0"}' data-sheets-value='{"1":3,"3":572.053354996}'>572.1</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Total equity"}'><strong>Total equity</strong></td>
<td style="text-align: right;" data-sheets-numberformat='{"1":2,"2":"#,##0.0"}' data-sheets-value='{"1":3,"3":2574.003966424}'><strong>2,574.0</strong></td>
<td style="text-align: right;" data-sheets-numberformat='{"1":2,"2":"#,##0.0"}' data-sheets-value='{"1":3,"3":3227.033658233}'><strong>3,227.0</strong></td>
<td style="text-align: right;" data-sheets-numberformat='{"1":2,"2":"#,##0.0"}' data-sheets-value='{"1":3,"3":813.781731966}'>813.8</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":" - Capital"}'>- Capital</td>
<td style="text-align: right;" data-sheets-numberformat='{"1":2,"2":"#,##0.0"}' data-sheets-value='{"1":3,"3":111.136885}'>111.1</td>
<td style="text-align: right;" data-sheets-numberformat='{"1":2,"2":"#,##0.0"}' data-sheets-value='{"1":3,"3":107.363115}'>107.4</td>
<td style="text-align: right;" data-sheets-numberformat='{"1":2,"2":"#,##0.0"}' data-sheets-value='{"1":3,"3":30}'>30.0</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Split ratio"}'><strong>Split ratio</strong></td>
<td style="text-align: right;" data-sheets-formula="=R[-71]C[0]" data-sheets-numberformat='{"1":3,"2":"0.00000%"}' data-sheets-value='{"1":3,"3":0.4437144}'><strong>44.37144%</strong></td>
<td style="text-align: right;" data-sheets-formula="=R[-63]C[-1]" data-sheets-numberformat='{"1":3,"2":"0.00000%"}' data-sheets-value='{"1":3,"3":0.5562856}'><strong>55.62856%</strong></td>
<td style="text-align: right;" data-sheets-value='{"1":2,"2":"-"}'>-</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"FY19 de-consolidated sales"}'>FY19 de-consolidated sales</td>
<td style="text-align: right;" data-sheets-numberformat='{"1":2,"2":"#,##0.0"}' data-sheets-value='{"1":3,"3":19.425641927}'>19.4</td>
<td style="text-align: right;" data-sheets-numberformat='{"1":2,"2":"#,##0.0"}' data-sheets-value='{"1":3,"3":6213.26356221}'>6,213.3</td>
<td style="text-align: right;" data-sheets-numberformat='{"1":2,"2":"#,##0.0"}' data-sheets-value='{"1":3,"3":1115.058658494}'>1,115.1</td>
</tr>
<tr><td colspan="4" rowspan="1" data-sheets-numberformat='{"1":2,"2":"#,##0","3":1}' data-sheets-value='{"1":2,"2":"Source: DART"}'><em>Source: DART</em></td></tr>
</tbody>
</table><p>There is no appraisal right. But it still requires shareholder approval.</p><p>The shareholder meeting is on December 4. Upon approval, the stock trading will get suspended from December 29 to January 22. The trading will resume on January 25.</p><table class="table table-striped">
<colgroup>
<col width="300">
<col width="200">
<col width="200">
<col width="200">
</colgroup>
<tbody>
<tr><td colspan="4" rowspan="1" style="width: 723.727px;" data-sheets-note="Sang Hyun Park: We have to buy shares until BOD+1 and hold onto them until the day immediately before the ex-rights date to be eligible to receive stock purchase rights. We then have to notify our dissenting opinion until the end of dissenting opinion notice period." data-sheets-value='{"1":2,"2":"Timetable"}'>Timetable</td></tr>
<tr>
<td style="width: 278.542px;" data-sheets-value='{"1":2,"2":"BOD meeting"}'>BOD meeting</td>
<td colspan="3" rowspan="1" style="text-align: right; width: 424.468px;" data-sheets-numberformat='{"1":5,"2":"[$-1009]mmmm\\ d\\,\\ yyyy","3":1}' data-sheets-value='{"1":3,"3":44084}'>September 10, 2020</td>
</tr>
<tr>
<td style="width: 278.542px;" data-sheets-value='{"1":2,"2":"Shareholder approval at EGM"}'>Shareholder approval at EGM</td>
<td colspan="3" rowspan="1" style="text-align: right; width: 424.468px;" data-sheets-numberformat='{"1":5,"2":"[$-1009]mmmm\\ d\\,\\ yyyy","3":1}' data-sheets-value='{"1":3,"3":44169}'>December 4, 2020</td>
</tr>
<tr>
<td style="width: 278.542px;" data-sheets-value='{"1":2,"2":"Trade suspension begins"}'><strong>Trade suspension begins</strong></td>
<td colspan="3" rowspan="1" style="text-align: right; width: 424.468px;" data-sheets-numberformat='{"1":5,"2":"[$-1009]mmmm\\ d\\,\\ yyyy","3":1}' data-sheets-value='{"1":3,"3":44194}'><strong>December 29, 2020</strong></td>
</tr>
<tr>
<td style="width: 278.542px;" data-sheets-value='{"1":2,"2":"Trade suspension ends"}'><strong>Trade suspension ends</strong></td>
<td colspan="3" rowspan="1" style="text-align: right; width: 424.468px;" data-sheets-numberformat='{"1":5,"2":"[$-1009]mmmm\\ d\\,\\ yyyy","3":1}' data-sheets-value='{"1":3,"3":44218}'><strong>January 22, 2021</strong></td>
</tr>
<tr>
<td style="width: 278.542px;" data-sheets-value='{"1":2,"2":"Re-listing"}'>Re-listing</td>
<td colspan="3" rowspan="1" style="text-align: right; width: 424.468px;" data-sheets-numberformat='{"1":5,"2":"[$-1009]mmmm\\ d\\,\\ yyyy","3":1}' data-sheets-value='{"1":3,"3":44221}'>January 25, 2021</td>
</tr>
<tr><td colspan="4" rowspan="1" style="width: 723.727px;" data-sheets-value='{"1":2,"2":"Source: DART"}'><em>Source: DART</em></td></tr>
</tbody>
</table>

Daelim Industrial announces a three-way demerger plan.It is part of the long-planned and anticipated holding company conversion reorganization.First, Daelim Industrial undergoes an equity spin-off at a split ratio of 0.44 to 0.56. As a result, we will have two separate entities: 1. DL Corp (holding company) and 2. DL E&amp;C (operating company - construction).Second, Daelim then spins out the petrochemical unit in the form of physical division. This newly spun-out company, DL Chemical, will become a wholly-owned subsidiary of DL Corp.







Overview

Name
Daelim Industrial Co Ltd


Ticker
000210


Surviving
DL Corp


- Ticker
000210


- Bourse
KOSPI


- Ratio
44.37144%


- Type
Holding company


- Business
Subsidiary management &amp; investment


- Stock split
1.0


New 1
DL E&amp;C Corp


- Type
Equity spin-off


- Ticker
TBA


- Bourse
KOSPI


- Ratio
55.62856%


- Type
Operating company


- Business
Construction


- Stock split
1.0


New 2
DL Chemical Corp


- Type
Spin-out (physical division)


- Ticker
N/A


- Bourse
N/A


- Ratio
N/A


- Type
Operating company


- Business
Petrochemical


- Stock split
1.0


Stock purchase
N/A


Banker
N/A

Source: DART










Financials - 3Q19 (₩ bil)
Surviving
New 1
New 2


Name
DL Corp
DL E&amp;C Corp
DL Chemical Corp


Split type
-
Equity spin-off
Spin-out (physical division)


Total assets
3,292.6
6,339.7
1,385.8


Total liabilities
718.5
3,112.7
572.1


Total equity
2,574.0
3,227.0
813.8


- Capital
111.1
107.4
30.0


Split ratio
44.37144%
55.62856%
-


FY19 de-consolidated sales
19.4
6,213.3
1,115.1

Source: DART

There is no appraisal right. But it still requires shareholder approval.The shareholder meeting is on December 4. Upon approval, the stock trading will get suspended from December 29 to January 22. The trading will resume on January 25.







Timetable

BOD meeting
September 10, 2020


Shareholder approval at EGM
December 4, 2020


Trade suspension begins
December 29, 2020


Trade suspension ends
January 22, 2021


Re-listing
January 25, 2021

Source: DART



Daelim Industrial Divestiture: Terms & Trading Situations (1P Diversion)

South Korea

Daelim B&Co Co., Ltd. designs, manufactures, and markets sanitary bathroom fixtures, ceramic tiles, bathroom units, and other construction materials for new apartments and schools.

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Daelim B&Co (005750 KS)

Daelim Industrial Divestiture: Terms & Trading Situations (1P Diversion)

???

Sanghyun Park

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