[At a Crossroads: Listed Companies] Fantagio② CEO Park Haeseon Holds Majority Shareholder Option Through CB

[Asia Economy Reporter Jang Hyowon] Park Haeseon, CEO of entertainment management company Fantagio, has laid the groundwork to change the largest shareholder by issuing convertible bonds (CB) with a put option (call option).

According to the Financial Supervisory Service's electronic disclosure on the 8th, Fantagio decided to issue CB worth 20 billion KRW to the Value 1st Investment Association. The nominal interest rate is 2.0%, the maturity interest rate is 4.0%, and the conversion price is 863 KRW per share. The number of shares that can be issued upon conversion is 23,174,971 shares.

This CB includes a call option allowing Fantagio's board of directors to sell 50% of the face value, i.e., 10 billion KRW worth, to a designated party from one year after issuance until the second anniversary. Currently, CEO Park Haeseon, who controls the board, can choose the owner of the CB.

If the CB worth 10 billion KRW is converted into shares, the largest shareholder may change. If the conversion price remains at 863 KRW, the number of shares that can be changed is approximately 11,627,907 shares. If repricing (conversion price adjustment) is applied up to 70%, up to 16,611,296 shares can be issued. After conversion, this would secure 12.12% to 15.68% of the total shares.

On the 14th of last month, Gold Finance Korea, the largest shareholder of Fantagio, signed a contract to transfer 22,775,800 shares (31.33%) to GNC Partners for 15 billion KRW. If the remaining payment is completed by the 27th, GNC Partners will become the largest shareholder.

After the stock transfer contract, Fantagio also resolved a paid-in capital increase of 20 billion KRW. If payment is completed by June 30, 24,509,804 new shares will be issued. The recipients are Istar Global and Y&Company, each planning to pay 10 billion KRW and receive 12,254,902 shares. These two companies are known to be affiliated with CEO Park’s side, independent of GNC Partners.

If CEO Park transfers the CB to Istar Global or Y&Company, which entered through the paid-in capital increase, their holdings could reach up to 28,866,198 shares, surpassing GNC Partners’ holdings. The shareholding ratio could reach up to 25.36%.

Meanwhile, Fantagio is a comprehensive entertainment company managing actors, singers, and producing albums. Artists such as Ong Seongwu of Wanna One, and groups like Astro and Weki Meki are signed under Fantagio.