By Park Hyong-ki
Doosan Corp. has been rallying over the last three days as it unveiled its plan to retire its repurchased shares worth about 63.5 billion won and pay dividends at 5,100 won per share.
Doosan closed at 112,500 won Friday, up 1.81 percent.
The family-run conglomerate with a focus on infrastructure business disclosed via a regulatory filing Thursday that it plans to cancel 1.06 million of its shares it purchased from November 2010-May 2012. The shares have been valued at last Wednesday’s closing price of 109,500 won per share.
Doosan indicated early this year that it will retire its shares in phases over the next three years to boost shareholders’ value, while the group seeks to improve finances of its companies under heavy debt.
The share cancellation would decrease share supplies on the market, while increase its share prices and potentially lead to higher valuation, analysts say.
In the end, it would further solidify Doosan owners’ position in the conglomerate. Park Yong-gon, Doosan honorary chairman, and his family, including his brother and former Doosan Chairman Park Yong-maan, hold a majority 44 percent stake in Doosan Corp., according to an audit filing. The National Pension Service, Korea’s pension manager, has a 6 percent stake in Doosan.
The dividend payout worth 5,100 won per share pending approval at its board and shareholders meetings would also increase the owners’ value.
“Dividend payout plan comes as Doosan’s earnings improved,” said Kim Dong-yang, analyst at NH Investment & Securities, noting the improvement was in part due to the liquidation of Doosan DST by its special purpose company, Doosan Investment Portfolio Holdings.
Doosan’s consolidated net profit stood at 94.6 billion won in the third quarter of this year, from a loss of 348 billion won a year ago.