Paratech Moves to Expand Stake with 5 Billion Won Investment by Hurim Robot..."Expectations for Management Stabilization and Corporate Revaluation"

Paratech is raising expectations for management stabilization and a potential revaluation of its corporate value, following the decision by its major shareholder, Hurim Robot, to acquire a large stake.

On May 27, Paratech announced that Hurim Robot plans to acquire a substantial number of Paratech common shares, as disclosed in a "Report on the Trading Plan of Specific Securities by Executives and Major Shareholders."

Hurim Robot intends to purchase 5,793,742 Paratech common shares between June 26 and July 25. This represents approximately 11.09% of the total shares. The planned acquisition price is based on the closing price of 863 won on May 22, with the total investment expected to be around 5 billion won. The acquisition will be carried out either on the open market or through off-market transactions.

Upon completion of the transaction, Hurim Robot will secure approximately 17.90% (9,350,402 shares) of Paratech, including the 6.81% stake held by its existing subsidiary, Hurim Infra Investment Association. However, in accordance with Article 173-3, Paragraph 3 of the Capital Markets Act, the actual execution amount may be flexibly adjusted within a range of 3.5 billion won to 6.5 billion won, meaning the final number of shares and acquisition price could change depending on market conditions.

The company emphasized that this transaction involves the purchase of existing market shares, not a paid-in capital increase through new share issuance. As such, there will be no dilution of existing shareholders’ equity, and the decision was made with shareholder value protection as a top priority.

The motivation behind Hurim Robot’s move to increase its stake is said to be the excessively low corporate valuation of Paratech relative to its growth potential. In fact, as of the closing price on May 22, Paratech’s price-to-book ratio (PBR) stood at just 0.49 times based on first-quarter results this year. This is less than half the company’s liquidation value, and within the industry, there is a view that Paratech could be revalued in the future, given its unrivaled firefighting technology and market dominance.

A Paratech representative stated, "This investment demonstrates Hurim Robot’s commitment to fostering us as a core affiliate and pursuing long-term, joint growth," adding, "The direct stake increase by the largest shareholder without issuing new shares is expected to send a positive signal to the market."

The two companies have previously collaborated in the field of AI-based firefighting safety solutions, including the joint development of "smart firefighting robots" integrating autonomous driving technology. Leveraging this investment and the resulting management stabilization, Paratech plans to accelerate the advancement of industrial firefighting robots, enter the AI smart factory safety solutions market, and expand its presence in the global firefighting equipment market, thereby strengthening its future business portfolio.

With Hurim Robot’s large-scale stake acquisition, Paratech is set to achieve both management stability and enhanced shareholder value, as it embarks in earnest on targeting the next-generation AI-based firefighting safety market.

This content was produced with the assistance of AI translation services.