Preparing for Crisis
The Samsung Group is planning to sell a number of buildings of Samsung Life Insurance, including its main office building located in Jung-gu, Seoul. The total price is estimated at no less than 2 trillion won (US$1.8 billion). According to industry sources, the number of buildings put on the market by the insurer is eight in Seoul alone, and more than 10 nationwide.
At present, Samsung Life Insurance is scheduled to be relocated to the group’s office building in Seocho-gu, Seoul along with Samsung Card and Samsung Securities. The general trading arm of Samsung C&T is slated to be housed in the group’s main office building in Jung-gu.
The group’s move is estimated to be to dispose of unnecessary real estate assets. In the first half of this year, the Samsung Group increased its cash by more than 1 trillion won (US$883 million) and cash equivalents of up to 17.86 trillion won (US$15.76 billion) by such means. At the same time, Samsung C&T paid debts amounting to 120 billion won (US$105.9 million) earlier this year, and Samsung SDI paid back 100 billion won (US$88 million) in Aug.
Such cost reduction and cash accumulation efforts are based on the group’s prediction that business conditions are likely to deteriorate at a rapid pace down the road. This move is expected to inspire the other conglomerates in Korea to take similar measures.