Sale of Self-Held Convertible Bonds at Discount to Largest Shareholder and Affiliates, Resulting in 3 Million New Shares and Severe Dilution Risk
THE E&M decided to sell KRW 3 billion (face value) of its 20th series unsecured private convertible bonds, previously acquired before maturity, for a total of KRW 6.321 billion.
Buyers include largest shareholder Shin Hwan-ryul (KRW 808 million), related party Navisfidelis5 (KRW 470 million), and Bioras Investment Association (KRW 1.722 billion). The conversion price is KRW 1,000, a 68% discount to the current stock price of KRW 3,145.
If fully converted, up to 3 million shares (7.42% of voting shares) will be issued, significantly diluting existing shareholders.
THE E&M raised approximately KRW 6.321 billion through this sale, but the specific use of proceeds is not detailed beyond 'fundraising'.
Payment is structured into a deposit (KRW 316 million), interim payment (KRW 1.58 billion), and balance (KRW 4.425 billion), with the balance payment date postponed to June 9, 2026.
[AI Comprehensive Analysis]This disclosure is negative, as selling convertible bonds at a deep discount to the largest shareholder and affiliates will lead to massive dilution. While raising KRW 6.3 billion in the short term, conversion could erode existing shareholder value by over 7%, increasing downward pressure on the stock.
KOSDAQ Filing Information
Filing: [Correction of Description] Report on Major Matters (Decision on Sale of Self-Convertible Bonds)