APACT Decides to Issue 25B KRW Convertible Bonds for Facility Investment... Conversion Price at 9,635 KRW, Dilution of 5.77%
APACT has decided to issue 25 billion KRW worth of 5th unregistered, unsecured private convertible bonds (CB). The purpose is to raise facility funds for expanding semiconductor backend packaging production capacity.
The conversion price is set at 9,635 KRW, calculated as 100% of the reference price (based on weighted average stock prices before the board resolution date). This is approximately 4.3% above the current market price of 9,240 KRW, representing a slight premium issuance.
The CB carries a 0.0% coupon and 3.0% yield to maturity, with repayment at 116.1184% of principal at maturity (June 10, 2031). Bondholders can exercise early redemption after 24 months, and the issuer has a call option to repurchase up to 30% of the initial issuance after 11 months.
The conversion will result in 2,594,706 new shares (5.77% of total outstanding shares). Including existing outstanding convertible bonds and bonds with warrants, the total potential dilution amounts to 11,804,364 shares, or 27.87% of current outstanding shares.
The conversion price is subject to adjustment every 7 months if the stock price declines, with a floor of 6,745 KRW (70% of the initial conversion price). This could increase dilution pressure if the stock price falls further.
Additionally, the CB agreement includes a tag-along right, requiring the largest shareholder to allow bondholders to sell under the same conditions in case of a change-of-control transaction.
[AI Comprehensive Analysis]While the CB issuance aims to fund facility investment—a positive move—it imposes a 5.77% dilution on existing shareholders and carries downside risk due to potential future conversion price adjustments. However, the premium conversion price limits immediate dilution, and the success of capacity expansion will be key to long-term value creation.
KOSDAQ Filing Information
Filing: Report On Major Events (Decision On Issuance Of Convertible Bonds)