Shin Hwa World eyes capital reorganisation to offset losses, regain market share

Jenny Ortiz May 27, 2024

SiGMA news

Shin Hwa World eyes capital reorganisation to offset losses, regain market share

Shin Hwa World Ltd, a leading South Korean integrated resort operator, has announced a Special General Meeting (SGM) on June 13 to discuss a significant capital reorganisation. The agenda includes consolidating shares and reducing share capital to offset accumulated losses.

These measures aim to strengthen the company’s financial foundation and ensure compliance with legal requirements, as stated in a Hong Kong Stock Exchange filing. At the SGM, shareholders will be asked to consider and approve proposed amendments to the company’s byelaw. The changes are designed to facilitate the capital reorganisation, thereby improving Shin Hwa World’s financial structure and aligning it with necessary legal standards.

In April, Shin Hwa released its financial report for the fiscal year 2023, showing a dip in consolidated revenue and a surge in losses. According to the report, Shin Hwa World’s consolidated revenue in 2023 saw a 25.3 percent decline to approximately $128.8 million (€119.2 million) from the previous year’s figure of approximately $166.1 million (€154.7 million).

Focus on financial stability

Shin Hwa World operates the Jeju Shinhwa World, a resort complex with a foreigner-only casino located in Jeju, South Korea. The company has emphasised that the proceeds from the rights issue are crucial for regaining and expanding its market share in Jeju, which it identifies as a top priority.

Utilization of additional funds

The company argues that the rights issue is essential for utilising additional funds to enhance its core business and foster growth. Despite the lifting of pandemic control measures, Shin Hwa World’s business performance by the end of 2023 had not yet met satisfactory levels. The company believes that strategic investments are necessary to improve this situation.

Enhancing attractions and services

To capitalise on the post-pandemic rebound in tourism, Shin Hwa World plans to increase the attractiveness of Jeju Shinhwa World. This will involve enhancing services and amenities across its theme park, water park, hotels, gaming areas, MICE (Meetings, Incentives, Conferences, and Exhibitions) facilities, and catering outlets.

Strategic marketing and HR development

In addition to physical improvements, the company intends to implement robust marketing programs and human resources development initiatives. These steps are seen as vital for rebuilding and enhancing the image of Jeju Shinhwa World, positioning it to better capture the anticipated surge in tourism.