EcoPro Affiliate 'Wangsan Information & Communication' Spins Off Communication Construction Business to Merge with PSIT... Overcomes Dissolution Crisis to Reorganize Business into 'Wholesale and Retail'

EcoPro conglomerate affiliate Wangsan Information & Communication has embarked on a major business reorganization by spinning off its formerly core information and communication construction business unit and handing it over to another company. This follow-up measure comes about five months after the company overcame a dissolution crisis alongside a change in management rights late last year.

According to a public disclosure on the 20th, Wangsan Information & Communication decided at a general shareholders' meeting that day on a corporate spin-off merger, where its 'information and communication construction business unit' will be physically spun off and absorbed by PSIT.

The company stated the purpose, saying, "We decided on the spin-off merger to clear out the business unit as a decrease in sales for the information and communication construction business unit is expected." Accordingly, PSIT will comprehensively succeed all rights and obligations regarding the spun-off assets, subcontracting agreements for construction in progress, and defect repair obligations for completed construction projects.

This merger will proceed as a method without a capital increase, without issuing new shares (spin-off merger ratio 1:0), so there will be no change in the capital of either Wangsan Information & Communication or PSIT. Following a creditor objection submission period, the final spin-off merger date is May 22.

After the spin-off, the surviving Wangsan Information & Communication will maintain a capital of 150 million won and plans to continue its business by changing its main business from the existing communication construction business to the 'wholesale and retail of communication materials' in the future.

Wangsan Information & Communication has gone through significant management twists and turns over the past few months. Previously, the company held an extraordinary general shareholders' meeting on October 15 of last year and resolved to dissolve for business liquidation.

However, immediately following the dissolution resolution, on October 29 of last year, new investors including current CEO Lee Ho-seop acquired the management rights by purchasing all 81% (12,150 shares) of the stakes held by familial shareholders such as former CEO Park Byung-hee, who was the previous largest shareholder. As the management rights were transferred, the company withdrew its previous disclosure regarding the occurrence of a dissolution reason in November, stating that "the new investors have decided to maintain the business," and normalized its management.

As a result, Wangsan Information & Communication, having escaped the dissolution crisis and made a fresh start under the leadership of CEO Lee Ho-seop, will completely transform its corporate constitution to focus on the distribution business (wholesale and retail) by detaching the construction business, which had weakened in competitiveness, through this business unit spin-off merger.