Boryung has finalized a physical spin-off separating its prescription drug (ETC) sales division into an independent subsidiary. The company will restructure its business model by assigning domestic sales and marketing to the newly established entity, set to launch in January next year, while the existing Boryung focuses on research and development (R&D), production, and global operations.
Boryung announced that it held its 63rd extraordinary general meeting of shareholders on the 28th at the Boryung Building in Seoul Jongno-gu, where a resolution to approve the spin-off plan for the ETC sales division was passed as proposed. A resolution to approve the company's treasury share holding and disposal plan was also passed.
Under this physical spin-off, Boryung will continue to exist as a listed company and hold 100% of the shares in the newly established subsidiary, 'Boryung Pharma Solution.' The spin-off date is January 4, 2027, and the new entity will launch as an unlisted company.
Boryung Pharma Solution will be exclusively responsible for domestic sales and marketing, product introduction, and distribution. The parent company, Boryung, will directly conduct R&D, production, and global business. The aim is to clearly define responsibility for decision-making and performance management by separating the organization handling everything from product development to production from the organization responsible for domestic sales at the corporate level.
Boryung CEO Kim Jung-gyun explained this spin-off as "clearly placing the authority of decision-making and responsibility for performance within a single entity."
The business separation is also a measure to respond to future expansion of the product portfolio. Boryung plans to add a total of 42 items by 2030, including 26 in-house products and 16 externally introduced products. For the expanding product lineup, the parent company will handle R&D and production, while the new entity will be responsible from sales and marketing through post-launch performance management.
CEO Kim emphasized that Boryung shareholders can continue to enjoy the results of both businesses through the parent company even after the physical spin-off. The plan is to allocate resources necessary for each business and monitor execution processes and outcomes to ensure that the business separation leads to sustained growth.
It was also reconfirmed that there are no plans to list the newly established entity. CEO Kim emphasized, "There are no plans to list Boryung Pharma Solution." He explained that the phrase in the public disclosure stating "no plan to apply for a pre-listing review within five years after the spin-off" does not mean an intention to pursue listing after five years have passed.
According to Boryung, listing a physically spun-off subsidiary requires the consent of parent company shareholders under exchange regulations, and this procedure is not exempted even if more than five years pass after the spin-off. CEO Kim stated, "It is a structure where listing cannot proceed without the consent of general shareholders."
The articles of incorporation of the newly established entity also include provisions requiring notification to the parent company before pursuing a listing and proceeding with the procedure only if the parent company expresses its approval.
At the shareholders' meeting on the same day, a resolution was approved to dispose of 1.774 million shares out of Boryung's 3.597096 million treasury shares for the purpose of employee compensation. Of this amount, 445,000 shares will be distributed via a 'stock grant' method, providing 250 shares per person free of charge to all 1,780 employees.
A stock grant is a system in which a company provides its own shares to employees free of charge for compensation purposes. It is a method where shares are provided instead of cash so that employees can share in the results of the company's growth.
A Boryung official explained, "This decision aims to foster an 'ownership culture' where employees hold company shares and share in the results of corporate growth."
in THEBIO
