DAEJIN ADVANCED MATERIALS decides to issue 15 billion KRW convertible bonds, raising concerns over 26% dilution of total outstanding shares
DAEJIN ADVANCED MATERIALS will issue a 15 billion KRW private convertible bond with a payment date of July 14, 2026, at a conversion price of 3,226 KRW, which is 14.2% above the current stock price of 2,825 KRW.
The proceeds are allocated for working capital, and the total potential dilution including existing convertible bonds reaches 43.52%, indicating a severe risk to existing shareholder value.
The counterparty is Song-sang Investment Association, an unlisted private equity fund, raising governance transparency concerns. The bond includes both put and call options adding structural complexity.
[AI Summary]This convertible bond issuance by DAEJIN ADVANCED MATERIALS could dilute existing shares by 26%, and the use of funds for mere working capital lacks a growth catalyst. The transaction with a private equity fund introduces counterparty risk.
KOSDAQ Filing Information
[Correction of Description] Report on Major Matters (Decision on Issuance of Convertible Bonds)