Sewon Cellontech: "Physical Division Essential for Securing Expertise in Regenerative Medicine and Strengthening Plant Equipment Business Capabilities"

[Asia Economy Reporter Hyunseok Yoo] Sewon Cellontech announced on the 10th that through the physical division of the bio-business division (hereinafter RMS division), the regenerative medicine business is expected to secure independence and expertise, and the chemical plant equipment business is expected to strengthen its order-taking capabilities.

A company official stated, "The regenerative medicine business and the business producing chemical plant equipment and pneumatic equipment are mutually heterogeneous businesses with different characteristics, so we decided to split the company to strengthen the expertise of each business division and expand investment," adding, "Cellontech, which will become a 100% subsidiary after the split, will be able to actively expand the regenerative medicine business by leveraging the advantages of being an independent corporation."

On the 5th, Sewon Cellontech held a board meeting and decided to physically split the RMS division. Once the physical division is completed, the RMS division will become a 100% subsidiary of Sewon Cellontech (the surviving company name after the split: Sewon ENC) (the newly established company name after the split: Cellontech).

Sewon Cellontech issued convertible bonds (CB) worth 40 billion KRW in 2019 for the purpose of raising funds necessary for the construction of production facilities and equipment for the regenerative medicine business. Although the CB issuance successfully raised a large amount of funds, the debt ratio increased, which hindered the expansion of orders in the chemical plant equipment business.

There were also significant non-operating losses related to the CB evaluation. Sewon Cellontech recently disclosed that during the internal settlement process of the last fiscal year, derivative liability evaluation losses due to the CB issuance increased.

A company official said, "Once the physical division is completed, Cellontech will be able to raise funds independently and efficiently develop the regenerative medicine business through swift decision-making," adding, "This physical division, based on shareholder consent, is a strategic decision to strengthen the independent survival capability of the regenerative medicine business and to make a leap forward. We have already started aggressively expanding the market by reinforcing sales and marketing personnel."

He continued, "The chemical plant equipment business will also establish an essential foundation to enhance order competitiveness by improving financial soundness and external credibility after the split. Furthermore, the company will focus investment resources on securing competitiveness in existing businesses to newly establish a global status in the chemical plant equipment field."