Plutus Investment Issues 20 Billion Won CB with Conversion Price 500 Won, Potential Dilution Up to 51.58%
Key Information: Plutus Investment has decided to issue 20 billion won worth of unregistered, unsecured private convertible bonds (24th series). Conversion price is 500 won, coupon rate 4%, yield to maturity 6%, maturity on May 29, 2029.
Dilution Impact: Upon full conversion, 40 million new shares will be issued, representing 29.79% of current outstanding shares. Including existing outstanding CBs (17th and 18th series), total potential new shares reach 48.62 million, or 51.58% of current shares, leading to significant dilution.
Conversion Price Adjustment Mechanism: The conversion price can be adjusted downward every 3 months after issuance, with a floor of 350 won (70% of initial 500 won). Upward adjustment is also possible but capped at 500 won.
Options: Bondholders have a put option starting from May 29, 2027 (one year after issuance). The company (or its designee) holds a call option on 50% of the bonds, which takes precedence over the put option.
Use of Proceeds: The entire 20 billion won will be used for operating expenses such as labor costs, new investments, and general expenses.
AI Comprehensive Analysis: Although the initial conversion price is set above the current stock price (430 won), the downward adjustment mechanism could lower it further if the stock price declines, exacerbating dilution. The operating fund purpose suggests a liquidity-focused move rather than growth-oriented, making this a negative event for existing shareholders.
KOSDAQ Filing Information
Filing: [Correction of Description] Report on Major Matters (Decision on Issuance of Convertible Bonds)