DigiCAP Issues KRW 9.5B Zero-Coupon Exchangeable Bonds... Using Dream Security Stake for Operating Funds and New Business Investment

DigiCAP decided to issue 9.5 billion won worth of 3rd unregistered unsecured private exchangeable bonds (EB) with payment date on June 9, 2026.
Zero coupon (0.0% interest rate), maturity on June 9, 2031.
Exchangeable into 2,047,413 common shares of Dream Security (2.03% stake) held by DigiCAP, at an exchange price of 4,640 won per share.
Proceeds will be used for operating funds (6 billion won) and new business investment (3.5 billion won) in AI-based video security, digital content protection, and design platform.
Bondholders have a put option to demand early redemption from 20 months after issuance (Feb 9, 2028).
Issuer has a call option (30% of bonds) exercisable every 3 months from 24 months after issuance (Jun 9, 2028) at a 1% annual premium.
This EB issuance uses existing stake without new equity dilution, limiting risk to existing shareholders.
[AI Comprehensive Analysis]The exchangeable bond issuance is a fundraising using existing holdings without direct dilution, so it is not a short-term negative. However, if Dream Security's stock price falls below the exchange price, conversion incentive is low, potentially increasing debt burden, and the success of new business investments remains uncertain.