Bitmax Decides to Issue 1.5 Billion Won 7th Convertible Bond... Cumulative Potential Dilution of 247.5% from Existing CBs Raises Shareholder Value Concerns

Bitmax decided to issue 1.5 billion won worth of 7th unsecured private convertible bonds. Conversion price is 2,636 won, 13.9% above current price (2,315 won). Maturity is June 4, 2029, with coupon and yield at 3.0%.
Proceeds: 1 billion won for partial repayment of existing 2nd CB (Largos Brick 2 Investment Association, 12.05 billion won, due 2028), and 500 million won for operating expenses such as salaries.
The conversion price is subject to quarterly adjustment based on market price, with a floor of 1,846 won (70% of initial). A decline in stock price would lower the conversion price, increasing potential dilution for existing shareholders.
This CB adds 569,044 potential shares (5.05% of outstanding). Combined with existing CBs (2nd: 2,301,375 shares, 6th: 23,602,603 shares), total potential shares reach 26,473,022 (247.5% of current outstanding), representing massive overhang.
Bondholders can demand early redemption at 100% of principal every 3 months starting one year after issuance, adding liquidity pressure on the company.
[AI Comprehensive Analysis]Although the new CB is small, it adds to an already huge potential dilution of 247.5%, exacerbating shareholder value erosion. The issuance merely addresses short-term cash needs without improving fundamentals, leading to increased debt and dilution. Investors should approach with caution.