Korea Union Pharm Decides to Issue 60 Million Shares at 500 Won to Bukwang Pharm Under Rehabilitation Plan… 75% Dilution Severely Erodes Shareholder Value
Korea Union Pharm has decided to conduct a third-party allotment rights offering of 60 million shares at 500 won per share to Bukwang Pharm under the court-approved rehabilitation plan. The total proceeds of 30 billion won will be used to repay rehabilitation secured claims and rehabilitation claims.
After prior capital conversion and reduction, the outstanding shares before this issuance are 19,854,006 shares. The new shares will increase total shares to 79,854,006, resulting in approximately 75% dilution of existing shareholders' equity, severely impairing shareholder value.
Bukwang Pharm, a KOSPI-listed company with total assets of 468 billion won and net profit of 14.3 billion won in 2025, will become the new largest shareholder, causing a change in management control.
The stock has been suspended since October 11, 2024 with a last closing price of 2,725 won, but the issuance price is set at face value of 500 won due to lack of market price. The listing date is scheduled for June 26, 2026 but may be delayed.
This rights offering is exempt from securities registration and replaces shareholder and board approvals with court authorization under the rehabilitation plan.
[AI Summary]Korea Union Pharm's 60 million share issuance at face value to Bukwang Pharm under rehabilitation dilutes existing shareholders by 75%. Funds are used solely for debt repayment with no growth investment, while management change adds uncertainty. Prolonged trading suspension and gap between last price and issuance price indicate further downside for shareholder value.
KOSDAQ Filing Information
[Correction of Description] Report on Major Events (Decision on Paid-in Capital Increase)