Facing poor performance, declining profitability, and a weak stock price, advertising and content production company SOOP is moving forward with the acquisition of its new office building in Pangyo. Analysts project that additional financial strain will result from increased borrowing costs and rising net debt. With immediate liquidity concerns, future stock market direction remains under close scrutiny.
According to an electronic disclosure filed on the 4th with the Financial Supervisory Service, SOOP announced on that day it has acquired land and a building located at 25 GB2-C Building, 25 Pangyo-ro 256beon-gil, Bundang-gu, Seongnam-si, Gyeonggi-do, in partnership with Hana Bank and Eiden Asset Management. The purchase price is 131.5 billion won, representing a cash outflow equivalent to 14.86% of the company’s total assets.
Industry sources indicate the new office building’s appraised value reaches approximately 139 billion won. SOOP’s contracted acquisition price is 5.3% lower than this external appraisal conducted by Shinwoo Accounting Firm.
The sales contract and property registration are scheduled for completion on the 30th. The new facility will consolidate operations from affiliated companies into a single location, aiming to integrate dispersed business units and technical development personnel to generate synergies. SOOP’s R&D (research and development) center is also expected to be established there. Currently, SOOP Group’s operational sites are scattered across seven locations: Pangyo, Samsung-dong, Seoheon, Gwacheon, Sangam, and others.
The acquisition of the new office building is anticipated to further increase SOOP’s financial burden. Reports indicate that SOOP plans to secure financing from institutional investors for this transaction. The company appears likely to minimize borrowing by selling existing assets and recovering lease deposits. As of June, its consolidated debt ratio stood at 69.2%, a 10.8 percentage point decrease compared to the same period last year (84.0%).
SOOP’s operating revenue for the first half of this year amounted to 209.9 billion won, down 14.6 billion won from the same period last year (224.5 billion won). During the same period, operating profit declined from 58 billion won to 33.8 billion won, while semi-annual net income fell from 45.9 billion won to 31.2 billion won. Cash holdings as of late June stood at 111.4 billion won, a reduction of 22.6 billion won compared to the end of last year (134 billion won). Most of this cash is held in demand deposits.
SOOP’s stock price has halved over the past year. As of market close on this day, shares traded at 38,050 won, up 350 won (0.93%) from the previous session. This represents a 51.9% decline from the 52nd-week high of 79,200 won recorded on September 12 last year.
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