a case study by Ian H. Giddy
(For Giddy's Corporate Financial Restructuring course)
The following materials are taken from stock exchange filings subimitted by Sammi Steel, the Korean iron and steel company, from 1996 to 1990.
Please look through the comany's sales
and profitability trends, its balance sheet, its leverage, its fixed charge
coverage and
other key indicators of financial health.
Do you see anything of concern? As a shareholder of this company, what
financial
restructuring, if any, would you recommend?
SAMMI
CORPORATION
1004,
DAECHI-DONG
GANGNAM-GUSEOUL
KOREA
(SOUTH)
SUMMARY
BUSINESS DESCRIPTION: TRADING CO. SPECIAL IRON & STEEL PRODUCTS
ACCOUNTED
FOR 67% OF 94 REVENUES; LUMBER, 23% & OTHER, 10% (PARENT CO.)
PRODUCT
LINES: INDUSTRIAL SERVICES
BUSINESS
DESCRIPTION: Sammi Corporation was established in 1959 and is
involved
in the trading of iron, steel and lumber. Iron and steel including
stainless
steel and pig iron accounted for 67% of 1994 unconsolidated revenues; lumber,
23% and other, 10%. Unconsolidated revenues accounted for 98% of 1994 consolidated
revenues. The company has one consolidated affiliate company in South
Korea.
CURRENT
OUTSTANDING SHARES: 11,997,032(SOURCE:12/31/94)
SHAREHOLDERS:
16,856(SOURCE:12/31/94) INCLUDES
PREFERRED SHAREHOLDERS
NUMBER
OF EMPLOYEES: 384(SOURCE:12/31/94)
PARENT COMPANY
MARKET
VALUE: 42,229,552,640(SOURCE:03/29/96)
| SAMMI STEEL ACOUNTS | |||||
| 12/31/96 | 12/31/97 | 12/31/98 | 12/31/99 | 12/31/00 | |
| TOTAL SALES | 860092928 | 312077056 | 313403392 | 357926400 | 397504000 |
| DEPRECIATION | 48807424 | 20596480 | 14608152 | 9611410 | 9547481 |
| DEPN AND OPERATING PROVISIONS | #N/A | #N/A | #N/A | #N/A | #N/A |
| OPERATING PROFIT | 16908176 | -45773296 | 1621437 | 37787568 | 22603072 |
| NET INTEREST CHARGES | 106842240 | 43646512 | 23082480 | 36842960 | -1439159 |
| EXTRAORD./SPECIAL ITEMS | 4783371 | 94161936 | -308504576 | -249374 | 181153184 |
| PRE-TAX PROFIT | -119978992 | -154311424 | -335593216 | 510473 | 189144496 |
| PUBLISHED AFTER TAX PROFIT | -119978992 | -184700176 | -342643456 | 510473 | 189142304 |
| MINORITY INTERESTS | #N/A | #N/A | #N/A | #N/A | #N/A |
| EARNED FOR ORDINARY | -119978992 | -184700176 | -342643456 | 510473 | 189142304 |
| EXTRAORD. ITEMS AFTER TAX | 0 | 0 | 0 | 0 | 0 |
| ORDINARY DIVIDENDS | 0 | 0 | 0 | 0 | 0 |
| EBIT | -13136750 | -110664912 | -312510720 | 37353424 | 187705328 |
| EBITDA | 35670672 | -90068416 | -297902592 | 46964848 | 197252816 |
| PUBLISHED CASH EARNINGS | -71171568 | -164103696 | -328035328 | 10121883 | 198689792 |
| EQUITY CAP. AND RESERVES | 82370176 | -113364688 | -470398464 | -179144240 | 32688928 |
| PREFERENCE CAPITAL | 0 | 0 | 0 | 0 | 0 |
| TOT. SHARE CAPITAL & RESERVES | 82370176 | -113364688 | -470398464 | -179144240 | 32688928 |
| MINORITY INTERESTS | #N/A | #N/A | #N/A | #N/A | #N/A |
| LONG TERM DEBT | 440858624 | 286657536 | 43574992 | 100071056 | 32494832 |
| TOTAL CAPITAL EMPLOYED | 636928768 | 281773568 | 284374016 | 398840832 | 282313472 |
| TOT FIXED ASSETS-NET | 394093056 | 178522240 | 226459056 | 311541504 | 299008000 |
| TOTAL INTANGIBLES | 41922272 | 17946320 | 7524832 | 255500 | 223562 |
| TOTAL STOCK AND W.I.P. | 395825920 | 42465776 | 30414496 | 33913104 | 42294512 |
| TRADE DEBTORS | 320383488 | 51261232 | 46451504 | 55170224 | 47901984 |
| TOTAL CASH & EQUIVALENT | 26788368 | 72350992 | 32692352 | 5917773 | 6289266 |
| TOTAL CURRENT ASSETS | 892811008 | 190406432 | 146692368 | 140415312 | 166345872 |
| ASSETS (TOTAL) | 1533741824 | 802149632 | 434367488 | 497221632 | 500905216 |
| TRADE CREDITORS | 240603680 | 100478864 | 11077383 | 8915348 | 10775785 |
| BORROWINGS REPAYABLE < 1 YEAR | 593311744 | 201129056 | 24282912 | 10424262 | 48489968 |
| TOTAL CURRENT LIABLITIES | 896813056 | 520376064 | 149993488 | 98380688 | 218591744 |
| NET CURRENT ASSETS | -4002035 | -329969664 | -3301094 | 42034592 | -52245872 |
| TOTAL DEBT | 1034170624 | 487786496 | 67857936 | 110495312 | 80984800 |
| NET DEBT | 1007382272 | 415435520 | 35165568 | 104577536 | 74695536 |
| ENTERPRISE VALUE (EV) | 1085312256 | 423042816 | 55740464 | 117579488 | 82833824 |
| MV | 169406624 | 45326160 | 23767008 | 15779957 | 9178136 |
| TOTAL NO. OF EMPL. (UNITS) | 3255 | 1007 | 984 | 957 | 896 |
| DIVIDENDS PER SHARE | 0 | 0 | 0 | 0 | 0 |
| NET EPS | -49576.99 | -76324.56 | -141595.25 | 198.01 | 86825.75 |
| PUBLISHED CASH EPS | -29409.11 | -67813.38 | -135558.38 | 3926.3 | 91208.56 |
| BOOK VALUE PER SHARE | 34036.52 | -46837.29 | -194351.88 | -43319.73 | 8285.07 |
| MARKET TO BOOK VALUE | 4.61 | -0.38 | -0.05 | -0.09 | 0.29 |
| SALES PER SHARE | 355402.56 | 128961.13 | 129511.94 | 138840.38 | 182474.25 |
OFFICERS:
HYUN
CHUL KIM/Chairman
HYUN
BAE KIM/Vice-Chairman
HEE
KYUNG CHAE/President
BONG
KYU LEE/Vice-President
HYUN
CHUL KIM/Vice-President
OWNERSHIP:
Hyun
Chul Kim, 9.78%
Click here for a graph of Sammi Steel share price performance since its IPO in 1987.
