Major shareholder C&P Farm discloses change in stock pledge agreements with no change in stake but high pledge ratio of 7.78% raises financial risk concerns
C&P Farm, holding 11.93% of HYUNDAI BIOSCIENCE, filed this report due to a change in stock pledge agreements with no change in the number of shares held.
Approximately 7.78% of the held shares, or 7,505,287 shares, are pledged as collateral to savings banks including Sangsangin Savings Bank, with total loans of about 19.5 billion KRW at high interest rates of 9.9% to 10% per annum.
C&P Farm's total liabilities stand at 81.1 billion KRW versus equity of 6.4 billion KRW, indicating a highly leveraged financial structure that could lead to forced sale of pledged shares if loan conditions are not met.
The exchangeable bonds issued by C&P Farm have a conversion price of 5,795 KRW per share, well below the current market price of 9,200 KRW, posing potential dilution upon conversion.
No shareholder return initiatives such as share buybacks or cancellations were disclosed.
[AI Summary]The refinancing of high-interest secured loans by the largest shareholder C&P Farm underscores its financial strain, and while not directly impacting HYUNDAI BIOSCIENCE's operations, the potential forced disposal of pledged shares and the dilutive effect of exchangeable bonds create downside risks for the stock.