[This Week's Paid-in Capital Increase] Public Offering Schedule for the First Week of June

[Asia Economy Reporter Hyunseok Yoo] In the first week of June, HYBE will conduct a rights offering subscription.

HYBE will hold a subscription for existing shareholders from June 1 to 2. Following that, a general public subscription will take place from June 4 to 7. Through this rights offering, a total of 2,227,848 shares will be issued, which corresponds to approximately 6.2% of the total issued shares.

The fixed issue price is 200,000 KRW per share, raising a total of 445.5696 billion KRW. Of the raised funds, 195.5696 billion KRW will be used as operating capital. Specifically, it will be used for producing performances and content for artists under its labels. Starting in the second half of this year, HYBE is preparing to resume offline concerts depending on the COVID-19 situation. They also plan to operate the Artist Museum, which will open at the new Yongsan headquarters, on a regular basis.

HYBE has signed a merger agreement for its 100% US-based subsidiary Big Hit America to acquire 100% of the shares of Ithaca Holdings LLC, a comprehensive US-based media holding company covering music management, record labels, publishing, film, and TV shows.

To acquire the shares, HYBE participated in a $950 million USD rights offering by Big Hit America through its own funds and an additional 450 billion KRW worth of won-denominated borrowings. Separately, HYBE also provided a debt guarantee for a $100 million USD loan that Big Hit America plans to borrow locally in the US.

Of the funds raised through the rights offering, 250 billion KRW will be used to repay debt. Although the payment date for the acquisition was expected to be mid-June, the payment schedule was moved up to the 7th of this month during acquisition negotiations. Consequently, HYBE decided to raise 450 billion KRW through financial institution borrowings. They will first borrow 450 billion KRW, complete the rights offering, and then repay 250 billion KRW.