Samsung SDS, Korea’s biggest IT solutions provider, said on Tuesday that it would raise the ceiling in the number of share issuances to secure capital for future business and acquisitions.

The limit will be increased to 200 million shares from 120 million shares, of which the company added more than 70 percent shares are already being traded in the off-exchange market.

The decision came after Samsung SDS held a shareholders’ meeting, revised its articles of incorporation and named new outside directors in line with plans to go public by the end of the year.

Samsung SDS chief executive Jun Dong-soo said the increased issuance would not dilute the value of its existing shares trading over-the-counter. Its OTC price is trading around 200,000 won.

“We expanded the issuance not because we need capital in the short term, but we may need it for potential mergers and acquisitions in the future,” Jun told the company’s shareholders.

“We will continue to focus on expanding in new business areas such as logistics IT, cloud computing and mobile services.”

The chief executive reiterated that it aimed for the IPO to boost its global presence amid constraints on its domestic business growth, and that it would aim to “successfully list on time.”

The company said its importance lies in pursuing the IPO within this year amid analysts’ forecast that Samsung SDS could list in October at the earliest, which would become the biggest IPO in Korea’s stock history.

Industry sources said the decision for increased IPO shares may have come as it would be more difficult to issue new shares more freely after it listed due to strict regulations. Also, a secondary offering would diminish its investors’ Samsung SDS shareholdings.

“Restrictions against large system integrators from participating in state projects such as e-government systems have led the top three such as Samsung SDS, LG CNS and SK C&C to seek growth either overseas or in other areas such as international sports events and data analytics,” an industry source said.

By Park Hyong-ki and Kim Young-won
(hkp@heraldcorp.com) (wone0102@heraldcorp.com)