[Public Notice+] Seha Conducts 39.1 Billion KRW Capital Increase... To Be Used for Short-term Loan Repayment

[Asia Economy Reporter Kum Boryeong] 'Seha,' a company specializing in white cardboard, is conducting a paid-in capital increase worth 39.1 billion KRW.

According to Seha on the 1st, the company decided on a paid-in capital increase of 39.1 billion KRW to repay borrowings and announced it on the 29th of last month.

This paid-in capital increase is mainly planned to be used for repaying short-term borrowings. After allocating 28 million common shares, which is 95% of the existing listed shares (20% to employee stock ownership and 80% to existing shareholders), the remaining shares will be offered through a general public subscription for forfeited shares.

Founded in July 1984, Seha entered the energy sector in 2005 by developing overseas oil fields in Kazakhstan but experienced financial deterioration due to insolvency. As a result, it applied for a workout in 2014, and in November of the same year, UAMCO Workout First Corporate Financial Stability Private Equity Fund became the largest shareholder through debt offset.

Subsequently, on the 14th of last month, a consortium of Hankuk Paper and Haesung Industry signed a stock transfer agreement worth approximately 55 billion KRW with UAMCO, changing the largest shareholder.

As of the first quarter of this year, Seha's total borrowings stand at about 97 billion KRW, with a borrowing dependency ratio of 50.9% and a debt ratio of approximately 352.6%. The interest expenses resulting from this amount to about 5 billion KRW annually. Among the total borrowings, short-term borrowings account for 91.4 billion KRW, representing the majority. Seha plans to repay 40 billion KRW borrowed from KB Securities through this paid-in capital increase.

A representative from Hankuk Paper stated, "Seha is a company with stable performance, recording an operating profit of 14.1 billion KRW and a net profit of 11.2 billion KRW last year. By reducing short-term borrowings through this paid-in capital increase and improving Seha's financial condition, we expect to achieve better performance every year as the recent downward stabilization of paper prices continues and the business environment remains favorable."

The record date for the new shares allocation in the paid-in capital increase is the 17th of this month. The subscription period for existing shareholders (including oversubscription) is from the 23rd to the 24th of next month, and the general public subscription for forfeited shares will be held from the 28th to the 29th. The final issue price of the new shares will be determined on the 20th of next month. The scheduled listing date is August 14th.