CoAsia Semi, which had hesitated to pursue a KOSDAQ initial public offering (IPO) amid the government's ban on dual listings, has decided to press ahead with its listing. The company plans to select an IPO underwriter as early as this month and systematically discuss its future strategy for entering the market. With most companies still deliberating whether to resume IPOs, CoAsia Semi's choice to confront the regulation head-on is expected to significantly influence the decisions of other firms whose plans have been stalled by the dual-listing issue.
According to the financial investment industry on the 3rd, CoAsia Semi sent requests for proposals (RFPs) to multiple securities firms last month to narrow down its pool of underwriter candidates. The underwriter is expected to take shape after competitive presentations (PTs) this month.
CoAsia Semi is a subsidiary in which KOSDAQ-listed CoAsia (045970) holds a 72.99% stake. Under the dual-listing regulation that takes effect on the same day, an affiliate in which a listed parent company holds a stake of 20% or more is recognized as being in a controlling-subsidiary relationship, and its IPO is banned in principle. To pursue a listing nonetheless, the parent company's board must prepare shareholder protection measures based on five obligations.
The top priority is preparing protection measures for the parent company's shareholders. Since CoAsia Semi was not established through a spin-off, there is no obligation to obtain the consent of CoAsia's shareholders. However, because it is highly likely to be classified as a core subsidiary of the group, the company must obtain their consent or take equivalent protection efforts. When CoAsia Semi received investment two years ago, its recognized corporate value was approximately 250 billion won. Given the surge in semiconductor-related stocks this year, this is expected to far exceed CoAsia's current market capitalization of about 70 billion won.
The key is proving the legitimacy of CoAsia Semi's listing to minority shareholders. As Duksan Neolux Core and DTS previously secured parent-company shareholder consent and passed the exchange's review, CoAsia Semi is likely to pursue a similar strategy. The standard for recognizing shareholder consent is the 3% rule applied to the appointment of audit committee members under commercial law. Under this rule, the voting rights of Lee Hee-jun, chairman of CoAsia Group and CoAsia's largest shareholder, are limited to 3% of his stake (19.52%). Minority shareholders, by contrast, hold a 72.45% stake.
The market believes that the decisions of companies stalled by the dual-listing issue will also shift in line with CoAsia Semi's move. "Despite the review approvals for Duksan Neolux Core and DTS, there is still a lack of data, and the process of securing parent-company shareholder consent is quite demanding, so most companies are deliberating whether to resume their listings," an investment banking industry official said. "CoAsia Semi's underwriter selection is an expression of its determination to push through the listing, even if that means securing the consent of the parent company's shareholders."
