LG Corp., the holding company of South Korea’s fourth-largest conglomerate LG Group, said on Thursday that it will retire 3.03 million treasury shares it already holds in a move to boost its shareholder value.
The share cancellation, amounting to 1.93% of its total outstanding shares, will be executed on Sept. 4, the company said in a regulatory filing.
Given the average stock acquisition price of 82,520 won per common share, the retirement will be worth 250 billion won ($180 million).
Treasury share cancellations are a common shareholder-friendly measure in Korea’s corporate sector, reducing the number of shares in circulation and boosting earnings per share.
LG said it also intends to cancel the remaining 3.03 million treasury shares it holds by the end of next year.
LG's headquarters in Seoul FIRST MID-YEAR DIVIDEND PAYOUT
Alongside the buyback cancellation, LG said it will pay an interim dividend for the first time, stepping up shareholder returns.
It plans to pay 1,000 won per common and preferred share to shareholders registered as of Sept. 12.
The payout, totaling 154.2 billion won, will be made on Sept. 26.
LG said it will increase its dividend payout ratio to 60% of its standalone annual net profit from the current 50%.
The company distributed 3,100 won per common share and 3,150 won per preferred share earlier this year, matching last year’s cash dividend payment.
Shares of LG Corp. finished up 4.9% at 75,500 won on Thursday, outperforming the broader Kospi benchmark index's 0.3% rise.
Write to In-Soo Nam at isnam@hankyung.com Jennifer Nicholson-Breen edited this article.
