Korea / Special Sits, Pairs, Index Rebalancing, Clepsydra Capital

Sanghyun Park

I investigate special situations, pairs, and index rebalancing trades in Korea.

Korea / Special Sits, Pairs, Index Rebalancing

Samsung Lee Family Inheritance Tax Payment Situation & Suggested Trading Positions

Samsung Inheritance Tax Event: Why Market Being Bearish on Samsung Electronics?

Samsung Electronics Yearend Special Dividend Possibility Checkup

Lee Family to Sell 2.2 Trillion Won Worth of Samsung Group Affiliates to Pay for Inheritance Tax

Gravity Works As WeWork Doesn't; Now Plan B

Clepsydra Capital

Investigate special situations, pairs, and index rebalancing trades in Korea.

Event-Driven

Below are the details of the disposal trust agreement that Samsung's Lee family members newly signed with the trust institution.<table class="table table-striped">
<colgroup>
<col width="100">
<col width="100">
<col width="100">
<col width="100">
<col width="100">
</colgroup>
<tbody>
<tr>
<td data-sheets-value='{"1":2,"2":"Disposal trust contract"}'>Disposal trust contract</td>
<td style="text-align: right;" data-sheets-value='{"1":2,"2":"Lee Bu-jin (daughter)"}'>Lee Bu-jin (daughter)</td>
<td colspan="2" style="text-align: center;" data-sheets-value='{"1":2,"2":"Lee Seo-hyun (daughter)"}'>Lee Seo-hyun (daughter)</td>
<td style="text-align: right;" data-sheets-value='{"1":2,"2":"Hong Ra-hee (spouse)"}'>Hong Ra-hee (spouse)</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Company"}'>Company</td>
<td style="text-align: right;" data-sheets-value='{"1":2,"2":"Samsung SDS Co Ltd"}' data-sheets-numberformat='{"1":2,"2":"₩#,##0.00T","3":1}' data-sheets-formula='=googlefinance(R[1]C[0], "name")'>Samsung SDS</td>
<td style="text-align: right;" data-sheets-value='{"1":2,"2":"Samsung Life Insurance co., Ltd"}' data-sheets-numberformat='{"1":2,"2":"₩#,##0.00T","3":1}' data-sheets-formula='=googlefinance(R[1]C[0], "name")'>Samsung Life Insurance</td>
<td style="text-align: right;" data-sheets-value='{"1":2,"2":"Samsung SDS Co Ltd"}' data-sheets-numberformat='{"1":2,"2":"₩#,##0.00T","3":1}' data-sheets-formula='=googlefinance(R[1]C[0], "name")'>Samsung SDS</td>
<td style="text-align: right;" data-sheets-value='{"1":2,"2":"Samsung Electronics Co Ltd"}' data-sheets-numberformat='{"1":2,"2":"₩#,##0.00T","3":1}' data-sheets-formula='=googlefinance(R[1]C[0], "name")'>Samsung Electronics</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Ticker"}'>Ticker</td>
<td style="text-align: right;" data-sheets-value='{"1":2,"2":"018260"}' data-sheets-numberformat='{"1":2,"2":"₩#,##0.00T","3":1}' data-sheets-formula='="018260"'>018260</td>
<td style="text-align: right;" data-sheets-value='{"1":2,"2":"032830"}' data-sheets-formula='="032830"'>032830</td>
<td style="text-align: right;" data-sheets-value='{"1":2,"2":"018260"}' data-sheets-numberformat='{"1":2,"2":"₩#,##0.00T","3":1}' data-sheets-formula='="018260"'>018260</td>
<td style="text-align: right;" data-sheets-value='{"1":2,"2":"005930"}' data-sheets-numberformat='{"1":2,"2":"₩#,##0.00T","3":1}' data-sheets-formula='="005930"'>005930</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Disposition trust amount"}'>Disposition trust amount (shares)</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":1509430}' data-sheets-numberformat='{"1":2,"2":"#,##0","3":1}'>1,509,430</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":3459490}' data-sheets-numberformat='{"1":2,"2":"#,##0","3":1}'>3,459,490</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":1509430}' data-sheets-numberformat='{"1":2,"2":"#,##0","3":1}'>1,509,430</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":19941860}' data-sheets-numberformat='{"1":2,"2":"#,##0","3":1}'>19,941,860</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"% of the shares out"}'>% of the shares out</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":0.019507274696359937}' data-sheets-numberformat='{"1":3,"2":"0.00%","3":1}' data-sheets-formula='=R[-1]C[0]/googlefinance(R[-2]C[0], "shares")'>1.95%</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":0.01729745}' data-sheets-numberformat='{"1":3,"2":"0.00%","3":1}' data-sheets-formula='=R[-1]C[0]/googlefinance(R[-2]C[0], "shares")'>1.73%</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":0.019507274696359937}' data-sheets-numberformat='{"1":3,"2":"0.00%","3":1}' data-sheets-formula='=R[-1]C[0]/googlefinance(R[-2]C[0], "shares")'>1.95%</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":0.003340466731070464}' data-sheets-numberformat='{"1":3,"2":"0.00%","3":1}' data-sheets-formula='=R[-1]C[0]/googlefinance(R[-2]C[0], "shares")'>0.33%</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":": Value"}'>: Value (at the last close)</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":0.242263515}' data-sheets-numberformat='{"1":2,"2":"₩#,##0.00T","3":1}' data-sheets-formula='=R[-2]C[0]*googlefinance(R[-3]C[0], "price")/1000000000000'>₩0.24T</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":0.247353535}' data-sheets-numberformat='{"1":2,"2":"₩#,##0.00T","3":1}' data-sheets-formula='=R[-2]C[0]*googlefinance(R[-3]C[0], "price")/1000000000000'>₩0.25T</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":0.242263515}' data-sheets-numberformat='{"1":2,"2":"₩#,##0.00T","3":1}' data-sheets-formula='=R[-2]C[0]*googlefinance(R[-3]C[0], "price")/1000000000000'>₩0.24T</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":1.42584299}' data-sheets-numberformat='{"1":2,"2":"₩#,##0.00T","3":1}' data-sheets-formula='=R[-2]C[0]*googlefinance(R[-3]C[0], "price")/1000000000000'>₩1.43T</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Trust institution"}'>Trust institution</td>
<td style="text-align: right;" data-sheets-value='{"1":2,"2":"KB Bank"}' data-sheets-numberformat='{"1":2,"2":"₩#,##0.00T","3":1}'>KB Bank</td>
<td style="text-align: right;" data-sheets-value='{"1":2,"2":"KB Bank"}' data-sheets-numberformat='{"1":2,"2":"₩#,##0.00T","3":1}'>KB Bank</td>
<td style="text-align: right;" data-sheets-value='{"1":2,"2":"KB Bank"}' data-sheets-numberformat='{"1":2,"2":"₩#,##0.00T","3":1}'>KB Bank</td>
<td style="text-align: right;" data-sheets-value='{"1":2,"2":"KB Bank"}' data-sheets-numberformat='{"1":2,"2":"₩#,##0.00T","3":1}'>KB Bank</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Contract date"}'>Contract date</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":44474}' data-sheets-numberformat='{"1":5,"2":"yyyy. mm. dd","3":1}'>2021. 10. 05</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":44474}' data-sheets-numberformat='{"1":5,"2":"yyyy. mm. dd","3":1}'>2021. 10. 05</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":44474}' data-sheets-numberformat='{"1":5,"2":"yyyy. mm. dd","3":1}'>2021. 10. 05</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":44474}' data-sheets-numberformat='{"1":5,"2":"yyyy. mm. dd","3":1}'>2021. 10. 05</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Contract ends"}'>Contract ends</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":44676}' data-sheets-numberformat='{"1":5,"2":"yyyy. mm. dd","3":1}'>2022. 04. 25</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":44676}' data-sheets-numberformat='{"1":5,"2":"yyyy. mm. dd","3":1}'>2022. 04. 25</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":44676}' data-sheets-numberformat='{"1":5,"2":"yyyy. mm. dd","3":1}'>2022. 04. 25</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":44676}' data-sheets-numberformat='{"1":5,"2":"yyyy. mm. dd","3":1}'>2022. 04. 25</td>
</tr>
<tr><td colspan="5"></td></tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Disposal deadline"}'>Disposal deadline</td>
<td style="text-align: right;" data-sheets-value='{"1":2,"2":"N/A"}'>N/A</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":44554}' data-sheets-numberformat='{"1":5,"2":"yyyy. mm. dd","3":1}'>2021. 12. 24</td>
<td style="text-align: right;" data-sheets-value='{"1":2,"2":"N/A"}'>N/A</td>
<td style="text-align: right;" data-sheets-value='{"1":2,"2":"N/A"}'>N/A</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Purpose"}'>Purpose</td>
<td style="text-align: right;" data-sheets-value='{"1":2,"2":"For inheritance tax payment"}'>For inheritance tax payment</td>
<td style="text-align: right;" data-sheets-value='{"1":2,"2":"For inheritance tax payment"}'>For inheritance tax payment</td>
<td style="text-align: right;" data-sheets-value='{"1":2,"2":"For inheritance tax payment"}'>For inheritance tax payment</td>
<td style="text-align: right;" data-sheets-value='{"1":2,"2":"For inheritance tax payment"}'>For inheritance tax payment</td>
</tr>
<tr><td colspan="5" data-sheets-value='{"1":2,"2":"Source: KRX FIND &amp; Korean NTS"}'>Source: KRX KIND</td></tr>
</tbody>
</table><div class="content-highlight">
Key takeaways
<ul>
<li>All the family members, except Lee Jae-yong, disclosed they had newly signed a disposal trust agreement on the same date (October 5) with the same trust institution, KB Bank.</li>
<li>However, all of these regulatory filings were published after the market closed last Friday. That is, the market only found it out late Friday, so whatever impact will likely be reflected in the price next trading day, which is next Tuesday.</li>
<li>All four trust contracts expire on April 25 next year. However, it does not necessarily mean that the deadline for the stake sale is April 25.</li>
<li>Only Samsung Life Insurance disclosed the deadline for sale to be December 24 of this year. But it strongly suggests that this December 24 will likely be the deadline for the other trust contrasts as well.</li>
<li>All four trust contracts clearly stated that the purpose was to pay inheritance tax.</li>
</ul>
</div>

Below are the details of the disposal trust agreement that Samsung's Lee family members newly signed with the trust institution.









Disposal trust contract
Lee Bu-jin (daughter)
Lee Seo-hyun (daughter)
Hong Ra-hee (spouse)


Company
Samsung SDS
Samsung Life Insurance
Samsung SDS
Samsung Electronics


Ticker
018260
032830
018260
005930


Disposition trust amount (shares)
1,509,430
3,459,490
1,509,430
19,941,860


% of the shares out
1.95%
1.73%
1.95%
0.33%


: Value (at the last close)
₩0.24T
₩0.25T
₩0.24T
₩1.43T


Trust institution
KB Bank
KB Bank
KB Bank
KB Bank


Contract date
2021. 10. 05
2021. 10. 05
2021. 10. 05
2021. 10. 05


Contract ends
2022. 04. 25
2022. 04. 25
2022. 04. 25
2022. 04. 25



Disposal deadline
N/A
2021. 12. 24
N/A
N/A


Purpose
For inheritance tax payment
For inheritance tax payment
For inheritance tax payment
For inheritance tax payment

Source: KRX KIND


Key takeaways

All the family members, except Lee Jae-yong, disclosed they had newly signed a disposal trust agreement on the same date (October 5) with the same trust institution, KB Bank.
However, all of these regulatory filings were published after the market closed last Friday. That is, the market only found it out late Friday, so whatever impact will likely be reflected in the price next trading day, which is next Tuesday.
All four trust contracts expire on April 25 next year. However, it does not necessarily mean that the deadline for the stake sale is April 25.
Only Samsung Life Insurance disclosed the deadline for sale to be December 24 of this year. But it strongly suggests that this December 24 will likely be the deadline for the other trust contrasts as well.
All four trust contracts clearly stated that the purpose was to pay inheritance tax.



Samsung Electronics Pref Shares (005935 KS)

Samsung Founding Family's Stake Sale: Impact on SamE Share Buyback Vs. Special Dividend