이 기사는 2021년 09월 17일 08:09 thebell 에 표출된 기사입니다.

South Korea’s Shinsegae Group is likely to see changes in its ownership structure as the heirs of the retail conglomerate dispose some of their shares to finance gift tax payments.

Shinsegae Inc bought a 52.08% stake in Gwangju Shinsegae for 228.5 billion won ($194.8 million), or 274,200 won per share, from Shinsegae Group vice chairman Chung Yong-jin, the company said in a regulatory filing on Tuesday.

The price represents a 20% control premium to the closing price on that day. After the purchase, Shinsegae Inc’s stake in Gwangju Shinsegae increased to 62.5%.

Chung Yong-jin will use the sale proceeds to pay a gift tax, Shinsegae Group said. He was gifted an 8.22% stake in Emart by his mother and Shinsegae Group chairman Lee Myung-hee last year, which resulted in a gift tax bill of around 190 billion won.

The sale fetched the money that matches the tax bill and is also expected to boost Chung’s cash flow, especially given that the tax will be paid in six installments over the five-year period.

His stake sale has prompted speculation that his sister, Shinsegae Department Store president Chung Yoo-kyung, may also want to dispose her shares in Shinsegae International to cover a gift tax liability.

Chung Yoo-kyung currently owes a 100 billion won gift tax bill, which needs to be paid over the five-year period. She owns a 15.14% stake in Shinsegae International, after selling a 5.87% stake in the fashion company in 2019 to pay a gift tax triggered by shares that were given by her father in 2018.

The 15.14% stake is roughly estimated to be valued at 260 billion won given Tuesday’s closing price of 200,000 won per share and a possible premium of 20%. A potential sale by Chung Yoo-kyung to Shinsegae Inc would raise its stake in Shinsegae International to some 54% from 38.91%.

The key is whether Shinsegae Inc has sufficient cash reserves to buy additional shares in Shinsegae International. At the end of June this year, the company had cash and cash equivalents of 224 billion won on a non-consolidated basis, most of which is likely to have been used to pay for shares purchased from Chung Yong-jin.

There is an option for Chung Yoo-kyung to raise money by selling her shares to external investors, although the likelihood is low. She may also pledge her shares as collateral to take out a loan.

One thing clear is that with Gwangju Shinsegae becoming a subsidiary of Shinsaegae Inc after the latest transaction, it has become evident that Chung Yong-jin leads Emart and Chung Yoo-kyung focuses on Shinsegae Department Store within the group.

“(Chung Yong-jin’s sale of shares in Gwangju Shinsegae) was to raise funds to pay his gift tax and to simplify the group’s governance structure,” an official at Shinsegae Group said. “We know nothing about how president Chung Yoo-kyung will raise money to fund a gift tax bill.” (Reporting by Hyo-jeom Jun)