HANSUNG CLEANTECH Decides to Issue 13 Billion Won Convertible Bonds... Conversion Price at 2,257 Won Raises Dilution Concerns
HANSUNG CLEANTECH decided to issue the 34th series unregistered private convertible bonds (CB) worth 13 billion KRW for operating funds. The conversion price is set at 2,257 won, approximately 4.2% lower than the closing price of 2,355 won on May 28.
The issuance amount is about 13 billion won. If fully converted, 5,759,858 new shares (9.98% of outstanding shares) will be issued. Combined with the existing 33rd CB (50 billion won, conversion price 1,510 won), potential dilution reaches 9,071,116 shares (17.47% of outstanding).
Bondholders can exercise a put option every 3 months from June 8, 2028. The issuer holds a call option for up to 30% (3.9 billion won) monthly from June 8, 2027 to May 8, 2028.
The conversion price is determined as 100% of the highest among 1-month, 1-week, and latest day volume-weighted average prices before the board meeting. In case of market decline, the price can be adjusted down to a minimum of 1,580 won (70% of initial conversion price).
The raised funds will be used for working capital in the industrial water treatment EPC business: 8 billion won in 2026, 3 billion in 2027, and 2 billion from 2028 onward.
[AI Comprehensive Analysis]While this CB issuance secures short-term operating funds, the conversion price set below the market price inevitably dilutes existing shareholders' value. Considering the existing CB, the total potential dilution is substantial. Although the call option may mitigate some dilution, the long conversion period and downward adjustment clauses pose negative implications for the stock price in the long run.
KOSDAQ Filing Information
Filing: Report On Major Events (Decision On Issuance Of Convertible Bonds)