1. Company names changed to DENSO PS and DENSO PS Electronics due to the capital increase in DENSO equity

(2) Corporate divestiture and the start of DENSO PS

In 1998, POONGSUNG Electric, facing difficulties in fund management due to the shock of the currency crisis, planned a joint venture with DENSO by selling its equity in POONGSUNG Precision to DENSO and transferring management rights to DENSO with a 51% equity stake. DENSO demanded that the automobile products division become independent as a precondition for the joint venture, and in May 2000, POONGSUNG Electric officially announced that “it would separate the company in a personnel split to enhance the competitiveness of automobile products”, convening a General Meeting of Shareholders in June to resolve the separation.

Then, on August 1, the company was finally split into POONGSUNG Electric (Automobile Products Business Division) and PSTEC (Electric Power Meter Business Division).

PSTEC remained on the KOSDAQ market, while POONGSUNG Electric, a newly established off-site enterprise, secured motors, other electrical equipment, and the Automobile Products Business Division, including air conditioners for vehicles, and pursued a joint venture with DENSO. POONGSUNG Electric relisted on the KOSDAQ market on September 8. This was the first case example in which a company had relisted on the KOSDAQ market through a corporate separation, with the speed of one month, compared to the usual time of six months for a new listing on the KOSDAQ market.

In October 2000, POONGSUNG Electric issued a third-party allotment of 4 million shares to DENSO and ASMO, a DENSO affiliate developing, manufacturing, and selling compact motor system products for automobiles.

DENSO and ASMO expanded their equity to 40%, and as a condition of participating in the capital increase, POONGSUNG agreed to transfer management rights to DENSO. As the management rights were transferred to DENSO, the company name was also changed to “DENSO PS Corporation” in January 2001, and the head office was changed from Seongsu-dong in Seoul to Changwon in South Gyeongsang Province.

Etsuo Hashiguchi became the first president of DENSO PS, and the full-scale expansion of the automobile products business started centering on the Changwon Plant.

Meanwhile, in 2000, the DENSO equity of POONGSUNG Electric was increased, and in 2001, POONGSUNG Precision was also renamed “DENSO PS Electronics.”