Dynamic Solution decides to issue 25.8 billion won in convertible bonds... risk of up to 45% dilution for existing shareholders
Dynamic Solution has decided to issue two private convertible bonds totaling 25.8 billion won (15 billion won to Brontes Technology Fund No. 83 and 10.8 billion won to Green Luminous No. 2 Investment Association).
Conversion prices are set at 1,347 won and 1,103 won, representing premiums to the current price of 1,057 won. However, anti-dilution clauses allow downward adjustment to a minimum of 773 won, increasing dilution risk if the stock price falls.
The new CBs can be converted into approximately 11.14 million and 9.79 million shares respectively, representing 20.99% and 24.56% of current outstanding shares. Total dilution from these CBs alone exceeds 45%.
The proceeds will be used to purchase real estate for the rehabilitation medical device business, which does not directly enhance growth or profitability.
A call option allows the company to force conversion of 80% of the CBs after 10 months, potentially accelerating dilution. A put option allows holders to request early redemption every 3 months after 6 months.
Existing outstanding CBs (worth 5.3 billion won) with a conversion price of 710 won add further dilution potential.
[AI Comprehensive Analysis]This massive CB issuance leads to over 45% dilution of existing shares, and the use of funds for real estate acquisition lacks direct value creation. Downward conversion price adjustments could exacerbate dilution if the stock declines. Investors should exercise caution.
KOSDAQ Filing Information
Filing: [Correction of Description] Report on Major Matters (Decision on Issuance of Convertible Bonds)