Last checked at 12 Sep 2016 09:42
Decision on spin-off
1. Method of Spin-off
(1) Pursuant to Articles 530-2 to 530-12 of the Commercial Act, Samsung Electronics (hereinafter referred to as "the Company"), among businesses operated by the Company, shall spin off its printing solutions business (hereinafter referred to as "Printing Business") and establish a new company (hereinafter referred to as "the New Corp."). The Printing Business shall be spun-off, and the Company will acquire 100% of the shares to be issued by the New Corp. Upon completion of the spin-off, the Company will remain as a listed company in the securities market and the New Corp. will be a non-listed company.
(2) The date of the spin-off is expected to be November 1, 2016, but the date is subject to change based on the final determination of the Company's Board of Directors.
(3) Pursuant to Paragraph 1 and 2 of Article 530-3 of the Commercial Act, the Company's Printing Business shall be spun off through a special resolution at the extraordinary general meeting of shareholders. According to Paragraph 1 and 2 of Article 530-9 of the Commercial Act, the Company and the New Corp. shall be jointly liable for liabilities (including responsibilities, which shall have be equal to liabilities in this Paragraph) of the Company that existed prior to spin-off.
(4) With respect to Paragraph (3), as the Company and the New Corp. shall jointly be liable for liabilities of the Company that existed prior to spin-off, but the Company reserves the right to request an indemnity from the New Corp. in the event the Company is required to make a payment on the liabilities belonging to New Corp. according to spin-off plan, or the Company and the New Corp. are indemnified from other sources of coverage for the Company. The New Corp. reserves the right to request an indemnity from the Company in the event the New Corp. is required to make a payment on the liabilities belong to the Company, or the Company and the New Corp. are indemnified other sources of coverage for New Corp.
(5) In principle, in regard to assets and liabilities of the Company and other rights and obligations including rights and obligations under public law, and properties having value (including license and permits, employment relationship, contracts and lawsuits), these properties shall be transferred to New Corp. if they are involved in the Printing Business, and shall stay with the Company, if they belong to any other business than the Printing Business.
(6) In principle, assets, liabilities, capital of the New Corp. shall be determined by distributing all the assets, contracts, rights, responsibilities and obligations of the Printing Business of the Company to the New Corp. and other properties that do not belong to the Printing Business shall stay with to the Company. The amount of assets, debts, and capital of the New Corp. shall be determined in overall consideration of the New Corp's future operation and investment plans and relevant legal conditions.
(7) With respect to the Printing Business, liabilities accrued or fixed after the date of spin-off as a result of acts or facts prior to the date of spin-off, or liabilities {including contingent claims under any applicable laws (including all lawsuits, fines, penalties, charges, additional tax collection, additional tax, additional charges, but not limited to), and all other liabilities of any kind} that have been already acquired or fixed prior to the date of spin-off but failed to be reflected in spin-off plan under other circumstances, shall be distributed to the New Corp. if it is caused by the Printing Business. If the cause of acts and facts relates to businesses other than the Printing Business, all the liabilities and claims as described in the Paragraph shall stay with the Company. If the source of the liabilities is uncertain, they will be distributed to the Company and the New Corp. according to the ratio of the net asset split due to this spin-off. Unlike the provision related to contingent claims under any applicable laws in this Paragraph, if the Company or the New Corp. fulfill contingent liabilities under any applicable laws, pursuant to this Paragraph, the company responsible for the obligation of contingent claims under any applicable laws shall pay the corresponding amount of contingent claims to the other party equivalent to the amount that the other party bore as described in this Paragraph.
(8) With respect to the Printing Business, fixed income securities and other relevant rights acquired after the date of spin-off as a result of acts or facts prior the date of spin-off, or fixed income securities and other relevant rights that have been already acquired prior to the date of spin-off but failed to be reflected in the spin-off plan under other circumstances (including contingent fixed income securities and other fixed income securities under any applicable laws) shall be distributed as described above.
(9) With respect to lawsuits to which the Company is a party prior to the date of spin-off, the lawsuits shall be transferred to the New Corp. if the lawsuits arise from the Printing Business. Any lawsuits arising out of any other business other than the Printing Business shall remain with the Company.
2. Objective of Spin-off
Among businesses operated by the Company, Printing Business shall be spun off to establish the New Corp. as an independent company, in order to improve the profitability of the Printing Business. Also, the Company will focus on enhancing its business by improving its other businesses and strengthening key competencies.
3. Impact of Spin-off and Expected Outcome
Pursuant to Articles 530-2 to 530-12 of the Commercial Act, the Company spinning off the Printing Business shall not cause any change in stock or ratio of shares owned by the major shareholders in the Company. Further, the spin-off shall not affect the consolidated financial statement of the Company.
4. Spin-off Ratio
As the Company is spinning off the Printing Business, then acquiring 100% of the shares to be issued by the New Corp., no spin-off ratio shall be calculated.
5. Business, Assets, and Liabilities to be Transferred
The Company, based on the spin-off plan, shall transfer all assets and liabilities, other rights and obligations, and properties having value (including license and permits, employment relationship, contracts and lawsuits) (hereinafter referred to as "Properties To Be Transferred") to the New Corp. However, shares of overseas affiliates owned by the Printing Business, among overseas affiliates of the Company, as of the date of this disclosure, shall not be included in the Properties To Be Transferred.
6. Company Financial Details post spin-off
(1) Company Name: Samsung Electronics Co., Ltd.
(2) Financial Details after Spin-off (KRW):
Total Assets | 163,103,997,909,708 |
Total Liabilities | 30,094,674,981,494 |
Total Equities | 133,009,322,928,214 |
Capital | 897,513,820,000 |
(as of June 30, 2016)
(3) Revenue of surviving business of the most recent fiscal year (KRW): 133,646,422,156,444
(4) Major Businesses: CE(Consumer Electronics),
IM(Information technology & Mobile communications),
DS(Device Solutions)
(5) Listed after Spin-off: Yes
7. New Corp. Financial Details
(1) Company Name: S-Printing Solution Co., Ltd. (tentative name)
(2) Financial Details (KRW) of Establishment:
Total Assets | 347,657,560,237 |
Total Liabilities | 209,134,736,061 |
Total Equities | 138,522,824,177 |
Capital | 50,000,000,000 |
(as of June 30, 2016)
(3) Revenue of New Corp. of the most recent fiscal year (KRW): 1,558,622,494,561
(4) Major Business: Printing Solutions Business
(5) Request to be listed: No
8. Scheduled Date of extraordinary general meeting of shareholders: October 27, 2016
9. Date of Spin-off: November 1, 2016
10. Scheduled Date of Spin-off Registration: November 4, 2016
11. Date of BOD Resolution (date of decision): September 12, 2016
- Number of Independent Directors Present at the BOD Meeting: 5 (100%)
- Attendance of Audit Committee: Yes
12. Matters to consider when making investment decision
(1) Pursuant to Articles 530-2 to 530-12 of the Commercial Act, the Company, among businesses operated by the Company, shall spin off the Printing Business and establish New Corp. The Printing Business shall be spun-off, and the Company will acquire 100% of the shares to be issued by the New Corp. Upon completion of the spin-off, the Company will remain as a listed company in the securities market and the New Corp. will be a non-listed company.
(2) Amendment or Change of pin-off plan: The spin-off plan may be changed in the process of consultation with relevant organizations, related laws, or in the approval at the shareholders meeting. Upon approval of the spin-off plan at the extraordinary general meeting of shareholders on October 27, 2016, the topics below of the approved spin-off plan, prior to the spin-off registration date, may be amended or changed according to the resolution of the Board of Directors of the Company in the event that (i) the amendment or change is reasonably necessary and such amendment or change do not cause any harm to shareholders of the Company and the New Corp. and/or (ii) the amendment of change is made within the scope that such change does not affect the inherent nature of the plan.
① Name of the New Corp.
② Schedule of Spin-off
③ Properties to be transferred following the spin-off and its estimated value
④ Financial structure before and after spin-off
⑤ The total number of stocks issued by the New Corp. on the occasion of spin-off
⑥ Matters concerning executives and audits of the New Corp.
⑦ Articles of association of the Company and the New Corp.
(3) Matters that require transition between companies: With respect to implementation of the spin-off plan, matters that require transition between the Company and the New Corp. (including materials, properties having value, and the Printing Business documents and data) shall be managed upon additional consultation between the Company and the New Corp.
(4) Appraisal rights of shareholders: Not applicable as this transaction constitutes a straight spin-off as stipulated under Article 530-12 of the Commercial Act.
(5) Succession of employment contracts and severance pay: The New Corp. shall succeed all employment contracts and relevant legal obligations (severance pay, loans, etc.) pertaining to all the current employees of the Printing Business as from November 1, 2016 (scheduled date of spin-off).
(6) Company Financial Details post spin-off and New Corp. Financial Details described above are based on the financial statement as of June 30, 2016, which was written according to K-IFRS. The estimated value that will be distributed to the New Corp. was calculated on this standard. For this reason, the values may be changed on the date of spin-off.
(7) Pursuant to Article 530-7 of the Commercial Act, the Company will keep spin-off plan documents and balance sheet of the Printing Business in its principal office from two weeks prior to the date set for the shareholders meeting until six months after the registration of spin-off.
(8) The scheduled date of finalizing the list of shareholders entitled to take part in the extraordinary general meeting of shareholders for approving spin-off plan is September 28, 2016.
(9) General assembly of corporate division report or inaugural meeting may be replaced with the notice and resolution of Board of Directors.
(10) The timeline of the spin-off is subject to change according to relevant laws and upon consultation with related organizations.
[Appendix] Pre/Post Spin-Off Financial Position
(June 30, 2016, K-IFRS, parent basis)
(Unit : KRW million) | |||
| Pre-spin | Post-spin | |
Surviving entity | New entity | ||
I. Assets | 163,313,133 | 163,103,998 | 347,658 |
1. Current assets | 65,317,792 | 65,070,212 | 247,580 |
Cash and cash equivalents | 3,098,264 | 3,098,264 | - |
Short-term financial instruments | 27,965,112 | 27,965,112 | - |
Short-term available-for-sale financial assets | 200,270 | 200,270 | - |
Trade receivables | 22,084,964 | 21,908,257 | 176,707 |
Non-trade receivables | 1,095,447 | 1,087,146 | 8,300 |
Advances | 935,944 | 920,181 | 15,763 |
Prepaid expenses | 2,328,405 | 2,302,369 | 26,036 |
Inventories | 6,884,335 | 6,866,757 | 17,578 |
Other current assets | 725,051 | 721,855 | 3,196 |
2. Non-current assets | 97,995,341 | 98,033,786 | 100,077 |
Long-term available-for-sale financial assets | 2,823,582 | 2,823,582 | - |
Investment in subsidiaries, associates and joint ventures | 43,018,912 | 43,157,435 | - |
Property, plant and equipment | 43,532,458 | 43,526,670 | 5,789 |
Intangible assets | 3,123,423 | 3,083,897 | 39,526 |
Long-term prepaid expenses | 3,982,624 | 3,930,866 | 51,758 |
Deferred income tax assets | 472,844 | 472,844 | - |
Other non-current assets | 1,041,498 | 1,038,493 | 3,005 |
II. Liabilities | 30,303,810 | 30,094,675 | 209,135 |
1. Current liabilities | 26,742,315 | 26,613,443 | 128,872 |
Trade payable | 4,798,465 | 4,714,921 | 83,544 |
Short-term borrowings | 6,728,897 | 6,728,897 | - |
Other payables | 4,526,101 | 4,520,543 | 5,558 |
Advances received | 128,845 | 128,401 | 443 |
Withholdings | 309,285 | 309,261 | 24 |
Accrued expenses | 4,729,568 | 4,715,072 | 14,496 |
Income tax payable | 1,047,173 | 1,047,173 | - |
Current portion of long-term liabilities | 5,644 | 5,644 | - |
Provisions | 4,454,559 | 4,430,173 | 24,386 |
Other current liabilities | 13,778 | 13,357 | 421 |
2. Non-current liabilities | 3,561,495 | 3,481,232 | 80,263 |
Debentures | 62,085 | 62,085 | - |
Long-term other payables | 2,562,665 | 2,498,744 | 63,921 |
Net defined benefit liabilities | 388,534 | 380,707 | 7,827 |
Deferred income tax liabilities | - | - | - |
Provisions | 546,266 | 537,751 | 8,514 |
Other non-current liabilities | 1,945 | 1,945 | - |
III. Equity | 133,009,323 | 133,009,323 | 138,523 |
1. Equities | 897,514 | 897,514 | 50,000 |
2. Share premium | 4,403,893 | 4,403,893 | 88,523 |
3. Retained earnings | 138,556,832 | 138,556,832 | - |
4. Other components of equity | -10,848,916 | -10,848,916 | - |
Note 1) The above figures can be revised to those as of the spin-off date.
2) The above figures are based on separate financial statements. The domestic law does not specify which type of financial statements shall be adopted for public disclosure. Since consolidated financial statements also includes the year's financial positions of other companies, we thought separate financial statements would be more appropriate in figuring out actual changes in the substances of the concerned companies' financial position.
3) The above figures are based on as of June 30, 2016 and can be adjusted in accordance with business circumstances by the date of spin-off.
4) The new corporation shall not succeed borrowings that are discounted by trade receivable to be transferred, with the succession of the trade receivables of the same amount.