By Lee Hyo-sik
The Korea Tourism Organization (KTO) said Wednesday that it has disposed of a 19 percent stake in Grand Korea Leisure (GKL), the operator of Seven Luck Casino, as part of the Lee Myung-bak administration’s drive to overhaul the governance structure of state-run companies.
The KTO still holds a controlling 51 percent stake in the operator of the foreigner-only casino chain. GKL currently operates a casino at the Millennium Hilton Seoul hotel at the foot of Mt. Nam in central Seoul, another in southern Seoul and a third in Busan.
On Dec. 10, it sold a 19 percent stake, or about 11.75 million shares, at 18,700 won per share on a block sale to 37 institutional investors, 4.1 percent discounted from the closing price of 19,500 won the previous day. The sale raised some 220 billion won.
When GKL went public in November 2009, the KTO disposed of a 30 percent stake and with the latest sale it completed a mandate to sell a 49-percent-stake in GKL under the government campaign of overhauling state enterprises.
“We generated about 220 billion won by selling the 19 percent stake in GKL. After paying corporate income taxes and dividends to the Ministry of Strategy and Finance and other stakeholders, we will be left with about 100 billion won,” said Kim Man-jin, director of the KTO’s corporate business support team.
Kim said the organization will spend the money to finance the costs of moving its headquarters to Wonju, Gangwon Province, by 2012, as well as other projects that are not funded by taxpayers’ money.
“We failed to dispose of GLK stakes last month. But thanks to the bullish market sentiment and brighter prospects for the casino industry, we were able to sell the shares. With a 51-percent-stake, we will likely receive about 10 billion won in dividends from GKL this year,” he said.