NAMSUNG CORPORATION Issues 2.7 Billion Won Exchangeable Bonds Using 262,390 Treasury Shares, Balancing Dilution Risk and Debt Reduction
NAMSUNG CORPORATION decided on December 18, 2025, to issue 2.7 billion won in private exchangeable bonds using 262,390 of its 488,967 treasury shares, with proceeds intended for early redemption of 2.7 billion won out of 5 billion won outstanding from its 31st exchangeable bond.
The potential dilution from full conversion is 7.25% of total outstanding shares, but the conversion price is set at a 15% premium to the reference price, at 10,290 won, providing some protection to existing shareholders.
The company concluded that the EB issuance is more favorable than bank borrowing, which would increase the debt ratio to 105.14% and incur interest costs leading to a larger EPS decline, whereas EB issuance lowers the debt ratio to 100.36% with a smaller EPS impact.
The remaining 226,577 treasury shares are planned for cancellation, employee compensation, or strategic partnerships to minimize market impact, though specific plans are pending further board resolution and disclosure.
On a standalone basis, the company recorded a net loss of 759 million won annualized for Q3 2025, with a debt ratio of 102.75% and 98.33% of assets pledged, limiting additional borrowing options.
The counterparties are major domestic financial institutions including Soosung Asset Management, KB Securities, and Samsung Securities, with no special relationships, and the EB includes no call option, alleviating concerns of controlling shareholder stake expansion.
[AI Summary]NAMSUNG CORPORATION raises 2.7 billion won via treasury share-backed exchangeable bonds to refinance existing debt without interest cost, improving its financial structure. However, potential 7.25% dilution and ongoing annual net losses of 759 million won pose investment risks.
KOSPI Filing Information
[Correction of Description] Material Facts Report (Decision on Disposal of Treasury Shares)