FADU Amends Convertible Bond Terms - Zero Coupon Rate and Maturity Extended by 5 Years to Ease Financial Burden
FADU submitted an amendment on June 30, 2026, reflecting changes in investment conditions due to a revised underwriting agreement for its 7th unregistered private convertible bond issuance of KRW 11.99 billion originally decided on May 21, 2025.
Key changes include a reduction in the maturity interest rate from 2.5% to 0.0%, an extension of the maturity date from May 23, 2030 to May 23, 2035, and an adjustment of the principal repayment rate from 113.2707% to 100.0000%, eliminating the redemption premium.
The conversion price adjustment clause for market decline and the floor adjustment price of KRW 7,515 were removed, meaning the conversion price will no longer be adjusted downward when the stock price falls. This reduces the incentive for bondholders to convert, thereby lowering potential dilution risk.
The proceeds will be used for Gen6 controller development, with KRW 9.831 billion in 2025 and KRW 2.159 billion in 2026. The bondholder is Zephyrus Growth-Type IT Corporation, a newly established entity with no recent fiscal year data.
[AI Summary]FADU significantly eased convertible bond terms to reduce interest and maturity repayment burdens, indicating financial strain. The dilution rate of 2.26% is neutral, but the counterparty being a new entity raises governance risks. The removal of the downward conversion price adjustment clause is positive as it reduces dilution risk in a falling stock price scenario.
KOSDAQ Filing Information
[Correction of Description] Report on Major Matters (Decision on Issuance of Convertible Bonds)