THE CODI Sells 3 Billion Won Self-Convertible Bond for Operating Funds, Potential Dilution over 12%
THE CODI decided to resell its 3 billion won worth of 8th unsecured private convertible bonds, which it had acquired before maturity on November 29, 2024, to individual investor Park Joon-sik. The sale proceeds of 3 billion won will be received in installments by August 13, 2026.
The conversion price of the bonds is 4,608 won, 39% above the current stock price of 3,310 won. However, full conversion would increase outstanding shares by 651,041 shares, representing a dilution of 12.05% of total shares outstanding, negatively impacting existing shareholder value.
The buyer is an individual with no disclosed relationship or verified creditworthiness, introducing counterparty risk. The stated purpose of the sale is to secure operating funds, but no specific use of proceeds or expected return on investment was provided.
This transaction essentially re-exposes the market to the same dilution risk that was previously retired when the company bought back the bonds. No financial soundness indicators such as BIS ratio or contingent liabilities were disclosed.
[AI Summary]THE CODI's decision to sell its self-convertible bonds results in over 12% potential dilution and lacks a clear growth strategy beyond raising operating funds. The transaction with an individual buyer raises governance transparency concerns and is likely to erode shareholder value.
KOSDAQ Filing Information
[Correction of Description] Report on Major Matters (Decision on Sale of Self-Convertible Bonds)