South Korean conglomerate Samsung Electronics Co. Ltd. (SSNLF.PK, SSNNF.PK) on Monday said it will spin off its loss making liquid-crystal-display or LCD business effective April 1. The company, in its filing, noted that the display market is undergoing rapid changes and organic light-emitting diode, or OLED panels will become the mainstream by fast replacing LCD panels.
Samsung's display panel business has recorded a loss in last year on reduced revenue, compared to the prior year. The company noted that adopting measures for change and innovation, including business restructuring, are essential to improve its competitiveness for Display business.
In a separate statement, Samsung said its Board of Directors approved that its unit Samsung LED, Ltd. will be merged into the parent and be dissolved thereafter. The merger, which is effective April 1, allows the company to nurture the LED business as the future growth engine of its component business.
The new entity will be called Samsung Display Co., Ltd and consider adopting various restructuring measures, including a merger with Samsung Mobile Display and S-LCD Corp. Samsung in January took the full ownership of S-LCD unit, previously a joint venture with Japanese consumer electronics giant Sony Corp. (SNE).
Samsung Display, following the spin off, will become Samsung's wholly-owned subsidiary and will have net assets worth 13.6 trillion won. The new corporation will issue 150 million shares and shareholders' equity would be 750 billion won. Samsung Display's sales for the latest fiscal year was 22.01 trillion won.
Samsung, the world's largest manufacturer of liquid crystal displays, while announcing its fourth-quarter results recently, had noted that Samsung outpaced market growth by a significant increase in TV panel shipments on the back of value-adding products such as LED and 3D TVS.
Meanwhile, the Display Panel business posted a 0.75 trillion won operating loss and 29.24 trillion won in revenue in the full year 2011.
Samsung today pointed out that an independent operation with specialization in display panels will enable its LCD business to achieve continuous growth. This is through strengthening its competitiveness, enhancing speed in investment/strategic decision-making process and establishing autonomous and responsible management.
The company is scheduled to arrange a general meeting for shareholder approval on March 16. The inaugural General Meeting of Shareholders of the new corporation would be on April 2.
In South Korea, Samsung shares closed Today's trading at 1,175,000 won, down 1,000 won or 0.09 percent on a volume of 224.96 thousand shares.
| || |
| To receive FREE breaking news email alerts for Samsung Electronics Co. Ltd. and others in your portfolio|
by RTT Staff Writer
For comments and feedback: email@example.com