Ildong Group is speeding up preparations to list its affiliate Ildong Bioscience on the stock market.
The group said it decided to sell some of its stake in Ildong Bioscience within the limit that does not affect management rights. The move is part of preparations for an initial public offering of Ildong Bioscience, it said.
In a public disclosure on Friday, Ildong Holdings said it would sell its partial stake in Ildong Bioscience to institutional investors, including NH Investment & Securities. The plan is part of the pre-IPO of Ildong Bioscience, the company said.
Ildong Holdings will sell 1.6 million shares of Ildong Bioscience, 20 percent of all shares worth 20 billion won ($17 million). Ildong Holdings said it would pay 13 billion won for the first part this month and the rest for the second part by the end of November.
Ildong Holdings used to have 5.6 million shares, or a 70.1 percent stake, of Ildong Bioscience. With the stock sale, Ildong Holdings’ stake will shrink to 50.1 percent. The second-largest shareholder is Ildong Pharmaceutical CEO Yun Woong-sub, who holds a 19.9 percent stake or 1.59 million shares.
The stake sale will enhance corporate and shareholder value and help secure funds for affiliates' operation and business promotion, Ildong Holdings said.
The stock sale will be an opportunity to receive market evaluations on the company’s affiliate firms and induce pre-investment, which could accelerate the IPO of Ildong Bioscience, the company said.
Ildong Holdings aims to attract investment for Ildong Bioscience and complete the IPO by 2023. However, the company has yet to select an underwriter.
Ildong Holdings' stock sale includes a put option (the right to sell a stock). If the IPO fails within three years from the transaction's closing date, the company can exercise the put option. It means that the company aims to complete the IPO of Ildong Bioscience within three years.
Ildong Bioscience was spun off from Ildong Pharmaceutical in 2016 and set up as an affiliate of Ildong Holdings. Ildong Bioscience specializes in health-functional foods and related ingredients.