Orion Holdings said on Tuesday it will cancel 2,488,770 treasury shares it holds within this year under the revised Commercial Act.

That is equivalent to 3.97 percent of total shares outstanding. The cancellation date will be finalised after an approval process by the management board.

The shares to be cancelled were valued at about 61.5 billion won based on the March 17 closing price.

Orion is strengthening its shareholder return policy to enhance shareholder value. It increased dividends this year at Orion and Orion Holdings. It met the requirements for high-dividend companies eligible for separate taxation of dividend income introduced by the government in January to revitalise capital markets.

Orion's consolidated dividend payout ratio rose to 36 percent, up 10 percentage points from 26 percent last year. Orion Holdings' payout ratio rose to 55 percent, up 25 percentage points from 30 percent last year.

A "corporate value enhancement plan" disclosed in June last year also includes policies to strengthen shareholder returns, including implementing a dividend policy with a payout ratio of at least 20 percent, gradually raising the payout ratio over the next 3 years and considering interim dividends.