Billions Decides to Issue 15 Billion Won Convertible Bonds with Stock Merge Adjustment and Condition Changes Raising Severe Dilution Concerns
Billions decided to issue 15 billion won worth of 7th unsecured private convertible bonds and corrected the previous disclosure. The amendments include raising the coupon rate from 0% to 3% and lowering the maturity redemption rate from 112.7271% to 103.1706%, making terms more favorable to bondholders.
Reflecting the stock merge, the conversion price was adjusted from 301 won to 1,505 won, but the number of shares to be issued upon conversion is 9,966,777 shares, representing 61.78% of the total outstanding shares, causing extreme dilution for existing shareholders. Including existing outstanding convertible bonds, the total potential dilution ratio approaches 110.40%.
The raised funds will be used for acquisition of securities of other corporations, but the specific target is undetermined. The issuee is JK New Technology Investment Fund No. 5, which has assets of only 1.7 billion won, raising questions about counterparty credibility. Although the company can exercise a call option to redeem up to 50% of the bonds early, it may not fully alleviate dilution pressure.
[AI Summary]The new convertible bond issuance by Billions poses extreme dilution risk to existing shareholders, with high uncertainty regarding the specific use of funds and the financial soundness of the counterparty. Even after the stock merge, the dilution ratio exceeds 60%, which is expected to negatively impact the stock price, so caution is advised for investors.
KOSDAQ Filing Information
[Correction of Description] Report on Major Matters (Decision on Issuance of Convertible Bonds)