South Korea’s Cuckoo Holdings said on Monday it has been notified by the Fair Trade Commission that its governance structure meets the requirements as a holding company, a move that will allow the company to speed up its reorganization to boost overall efficiency and competitiveness.
In July last year, Cuckoo Electronics was transformed into a holding company named Cuckoo Holdings, separating its rental and home appliance divisions into independent Cuckoo Homesys and Cuckoo Electronics, respectively.
Cuckoo Electronics is a strong cash cow subsidiary that sells electric rice cookers and other home appliances. It operates two plants in Korea and one in China. Its shares are not publicly traded.
Under the current law, a holding entity should own more than 20 percent of its listed subsidiary. Cuckoo Holdings controlled 16.82 percent of Cuckoo Homesys before it acquired new shares from the subsidiary to meet the threshold this year.
Shares of Cuckoo Holdings fell 0.87 percent to finish Thursday at 171,500 won ($155) while Cuckoo Homesys remained unchanged at 225,000 won.
Cuckoo Holdings earned 16.42 billion won in the second quarter ended June 30 over on a consolidated basis, up 130 percent from 7.13 billion won a year ago. Sales grew 17.7 percent to 107.42 billion won and net profit soared 177.9 percent to 30.84 billion won.