Seoul-based private equity firm Hahn & Co. will award employees of Namyang Dairy Products Co., a South Korean dairy product producer, 1.6 billion won ($1.2 million) worth of treasury shares in compensation for Namyang’s successful turnaround under its management.
Each of Namyang’s 1,546 employees will receive 16 shares, valued at about 1.04 million won based on the company’s closing stock price on Tuesday, under a compensation plan approved by Namyang’s board of directors on Wednesday, the PE firm said.
The shares will be distributed without restrictions on resale.
The board also approved the cancellation of 9.8 billion won worth of treasury shares as part of a broader shareholder-friendly policy.
TURNAROUND AFTER THE END OF LEGAL BATTLES
Hahn & Co., one of South Korea’s top three private equity firms, agreed to take over Namyang’s 53.08% stake from former Chairman Hong Won-sik and his family members in 2021 and officially became the controlling shareholder in January 2023, following a protracted legal battle with the founding family over management control.
The legal fight was triggered after Hong abruptly canceled the deal a few months later.
During the three-year dispute, Namyang, once Korea’s largest dairy company, saw a plunge in both sales and market capitalization.
But under Hahn & Co.’s stewardship, the company returned to profitability in the third quarter of last year and has remained in the black since.
In March 2024, Namyang shareholders approved a proposal to replace Namyang’s board with Hahn & Co.-appointed executives and other new members, formally ending family control of the 60-year-old dairy and beverage group.
Since holding the reins, the buyout fund has focused on restructuring Namyang’s governance and operations, implementing measures to boost transparency and efficiency.
It has also buoyed Namyang shares through a 10-for-1 stock split and multiple share buyback and cancellation programs valued at 60 billion won in total.
Namyang shares added 3.7% to close at 67,200 won on Wednesday.
Hahn & Co. manages a portfolio of 38 companies with combined assets totaling $30.1 billion, making it Korea’s largest institutional private equity company.
By Sookyung Seo
skseo@hankyung.com
Jennifer Nicholson-Breen edited this article.
