Exercise of Exchange Rights for Exchangeable Bonds: 636,589 Treasury Shares Delivered at 19% Discount to Market Price, Risk of Further Value Transfer to Bondholders
On February 24 and May 26, 2026, exchangeable bondholders exercised their exchange rights, receiving a total of 636,589 treasury shares (1.33% of total outstanding shares).
This is pursuant to the terms of the 1st series exchangeable bonds issued on June 25, 2025, with an exchange price of KRW 2,765 per share.
The exchange price is approximately 19% below the current market price of KRW 3,420, resulting in a negative transfer of value from existing shareholders to bondholders.
Remaining exchangeable bonds (face value KRW 3 billion) can be exchanged for up to 1,084,990 additional shares at the same discounted price, posing further risk of shareholder value erosion.
Since treasury shares are delivered rather than newly issued shares, the total share count remains unchanged; however, providing treasury shares at a discount is unfavorable for shareholder returns.
[AI Comprehensive Analysis]The exercise of exchange rights is negative for existing shareholders as treasury shares are delivered at a steep discount. The potential for further exchanges of remaining bonds may continue to pressure the stock price, warranting investor caution.