Sangji Construction's Largest Shareholder Central Advanced Materials Subscribes for 100% of Its Allocation in Capital Increase

Central Advanced Materials, the largest shareholder of KOSDAQ-listed Sangji Construction, subscribed for all of its allocated shares in the existing shareholders' subscription for the paid-in capital increase. The company said that the largest shareholder's direct investment amid weakened investor sentiment due to the sluggish construction industry demonstrates its commitment to responsible management.

Sangji Construction said on November 4 that Central Advanced Materials, its largest shareholder, subscribed for all 277,009 new shares allocated to it in the existing shareholders' subscription for the shareholder-priority public offering capital increase, which took place on November 2 and 3. The subscription amount was approximately KRW 1.385 billion.

Central Advanced Materials holds 858,987 shares in Sangji Construction, making it the company's largest shareholder, with a 12.58% stake. In this capital increase, approximately 0.32248 new shares were allocated for each existing share, and Central Advanced Materials subscribed for its entire allocation. Across all existing shareholders, subscription demand reached 28.84% of the shares allocated.

Sangji Construction said it views the largest shareholder's full subscription as a sign of confidence in the viability of its key development project and the company's medium- to long-term value. It also expects this to ease concerns about a decline in the largest shareholder's stake and uncertainty over corporate governance if the shareholder had not participated.

The company is also moving forward with its key project, the Sangji Kailoom Escala development in Nonhyeon-dong, Gangnam-gu, Seoul. According to an appraisal by Jeil Appraisal Corporation, the current appraised value of the four lots comprising the project site is approximately KRW 160.03 billion, reflecting the station-area revitalization project and the planned upzoning. The estimated value after the upzoning is completed is approximately KRW 243 billion.

The estimated value after upzoning of the two lots at 98 and 98-1 Nonhyeon-dong, owned by subsidiary Kailoom Dosan, was assessed at KRW 127.02 billion. Their current appraised value is KRW 83.62 billion. The company said the estimated value of the land exceeds Kailoom Dosan's outstanding bridge loan balance of approximately KRW 68.2 billion, giving it an asset base to help manage the project's financial burden.

Sangji Construction plans to complete the review related to the station-area revitalization project in the second half of 2026, obtain approval for design changes in February 2027, and convert the financing to project financing (PF) and begin construction and sales in June 2027. The company said it received an excellent technology rating in a technology analysis report by NICE Information Service in June, based on its 30 years of experience in high-end residential construction and specialized construction methods.

The general public offering for this capital increase will take place on November 5 and 6 through SK Securities, the lead manager. The payment date is November 10, and the new shares are scheduled to be listed on November 20. Central Advanced Materials is reportedly considering subscribing for additional shares in the general offering.

Sangji Construction also emphasized that the capital increase is being conducted on a best-efforts basis rather than through a standby underwriting arrangement. If any shares remain unsubscribed in the general offering, they will be canceled rather than issued, reducing the number of new shares issued. The company expects the overhang burden after the new shares are listed to remain limited, also taking into account the possibility of further participation by the largest shareholder.

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