Naintech Decides to Issue 16 Billion Won Zero-Coupon Perpetual Convertible Bond with Changed Terms, Increasing Potential Dilution Risk
Naintech decided to issue 16 billion won in unregistered unsecured private perpetual convertible bonds of the 4th series to raise operating funds, including a change in terms that lowers the coupon rate from 2.0% to 0.0% and reduces the yield to maturity from 5.0% to 2.0%.
The conversion price of 3,613 won is higher than the current stock price of 2,205 won, but the anti-dilution adjustment clause may lower it in case of a market decline, making conversion unlikely without a price rise and limiting immediate dilution. The new issuance could result in 4,428,452 shares, or 7.7% of outstanding shares, and combined with existing convertible bonds, the potential dilution rate reaches 18.5%.
The counterparty is SKS PE-JB Woori New Technology Business Investment Fund No.1, a mid-tier domestic private equity fund, and the proceeds will be used for working capital such as raw material purchases. The issuer retains a call option on up to 30% of the bonds, giving it flexibility after the terms change.
[AI Summary]Naintech's convertible bond issuance raises operating funds at low interest rates, but the high conversion price relative to the stock price may cap appreciation and create long-term dilution risk. The combined potential share increase from existing and new convertibles heightens shareholder value dilution, and weakened investor protections are negative for the stock price.
KOSDAQ Filing Information
[Correction of Description] Report on Major Matters (Decision on Issuance of Convertible Bonds)