HanWool & Jeju Drastically Revises CB Issuance Terms - Amount Reduced to 6.75B Won, Conversion Price Raised to 19,783 Won, Aimed at Acquiring Dongyang Precision Shares
HanWool & Jeju submitted an amendment on July 1, 2026, significantly revising the terms of its 13th convertible bond issuance. The offering amount was reduced from 10 billion won to 6.75 billion won, and the conversion price was raised from 8,680 won to 19,783 won, easing concerns about shareholder dilution compared to the initial disclosure.
The purpose of the funds changed from operating expenses to acquisition of securities in other corporations. Specifically, the company will acquire common shares of Dongyang Precision Works Co., Ltd., a non-listed weapons and ammunition manufacturer, through a contribution-in-kind from the company and individuals including Choi Jong-jin and Park Jae-wan. Dongyang Precision recorded sales of 48.3 billion won and net income of 1.7 billion won in 2025.
The payment method changed from cash to in-kind. The value of Dongyang Precision shares was assessed by an external appraiser Yeo-il Accounting Corporation using the discounted cash flow method, with a per-share valuation range of 11,870 to 16,039 won. While the total acquisition amount of 6.75 billion won appears reasonable, the transaction structure raises transparency questions.
After the amendment, the dilution ratio from the new CB stands at 12.58% of outstanding shares 2,371,816, down from the previous 33.52%. However, including all existing CBs and bonds with warrants, the total potential dilution ratio reaches 95.58%, still posing significant share increase risk.
[AI Summary]HanWool & Jeju's revision of CB terms reduces issuance size and raises conversion price close to market, alleviating shareholder dilution. The shift in fund usage to acquire Dongyang Precision shares signals diversification into defense, but the in-kind transaction structure and high cumulative dilution require ongoing investor monitoring.
KOSDAQ Filing Information
[Correction of Description] Report on Major Matters (Decision on Issuance of Convertible Bonds)