KT&G has refused to spin off its ginseng business as requested by activist investor Flashlight Capital Partners, reports The Korea Herald.
“The spinoff will have little to no benefit to the company’s corporate value and shareholders from a long-term perspective,” KT&G Senior Executive Vice President Bang Kyung-man said.
Bang expressed concern that KT&G would potentially lose “synergy” in the event of the ginseng unit’s separation.
Flashlight Capital Partners has been putting pressure on KT&G to increase dividends and spin off its ginseng unit into a separate listing, among other things.
KT&G plans on initiating a share buyback program and aims to increase its overseas sales to over half by 2027. To raise the needed capital, KT&G can sell property assets and borrow from banks, according to Bang.