KOAS Amends 2.51B Won 8th CB Issuance: Conversion Price Lowered to 2,030 Won, Up to 9.92% Dilution Risk
KOAS has amended its decision to issue the 8th series unregistered, interest-bearing, unsecured private convertible bonds five times, changing the payment date to June 26, 2026, and slightly lowering the conversion price from 2,047 won to 2,030 won (a 0.83% decrease).
The total bond issuance amounts to 2.51 billion won. Upon conversion, 1,236,453 shares (based on the conversion price of 2,030 won) will be issued, representing 9.92% of total outstanding shares. The minimum adjusted conversion price is 1,421 won (70% of the initial price), posing a risk of further dilution if the stock price declines.
The bondholder is Korea Livestock Data Co., Ltd., which had negative equity of -48.33 billion won and a net loss of 8.149 billion won in fiscal year 2024, indicating a weak financial condition.
The company plans to use the raised funds (2.51 billion won) to acquire securities of another company, but the specific target and conditions have not been determined, adding uncertainty to the use of proceeds.
The call option allows the issuer or its designee to repurchase up to 30% (approximately 753 million won) of the bonds at a 1% premium from one month to 18 months after issuance. If exercised by the majority shareholder, it could increase their stake by up to 4.25%, but the current market price (2,020 won) is below the conversion price (2,030 won), making immediate gains negligible.
Including existing convertible bonds (4th to 7th series), total potential converted shares amount to 3,406,534, or 27.34% of current outstanding shares, indicating significant long-term dilution pressure.
[AI Comprehensive Analysis]This convertible bond issuance has an unclear purpose, involves a financially weak specific investor, and raises concerns about equity dilution due to the lowered conversion price. Considering multiple amendments and cumulative dilution from existing CBs, it is likely to negatively impact existing shareholder value. Investors should closely monitor future conversion exercises and fund usage.
KOSPI Filing Information
Filing: [Correction of Description] Report on Major Matters (Decision on Issuance of Convertible Bonds)