KT&G unveiled a medium-term business plan to boost its investment and sales in an apparent bid to fend off a campaign by a Singapore-based activist fund, reports The Korea Herald.
The plan calls for the company to invest a total of KRW 3.9 trillion (USD 3.1 billion) by 2027 in three businesses: next-generation tobacco and nicotine products, often referred to as e-cigarettes, and health supplement products, including ginseng, as well as overseas businesses related to vapes.
It also aims to increase its annual sales to over KRW 10 trillion, a 73 per cent increase from last year’s estimated sales of KRW 5.9 trillion, the report said.
KT&G, however, said there were no plans to spin off its ginseng unit for a separate listing, rejecting a claim by activist investor Flashlight Capital Partners. “The spin-off will have little to no benefit to the company’s corporate value and shareholders from a long-term perspective,” KT&G Senior Executive Vice President Bang Kyung-man said. Bang expressed concern that KT&G may lose “synergy” if the ginseng unit is spun off.
The corporate plan was announced amid continued pressure from the activist fund ahead of the company’s annual general meeting scheduled for March. Among other things, the fund has asked the company to increase dividends and spin off the ginseng division into a separate listing.
SOUTH KOREA
KT&G refuses ginseng unit spin-off
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