Busan Jugong, 5 Billion KRW Paid-in Capital Increase... "Securing Operating Funds to Improve Liquidity"

[Asia Economy Reporter Hyunseok Yoo] Busan Jugong announced on the 6th that it has decided on a third-party allotment paid-in capital increase worth 5 billion KRW. The issue price per new share is 548 KRW, and the payment date is the 13th. Participants in the paid-in capital increase include the KOSPI-listed company Sewon ENC, Cosmos No.1 Association, and Newtech No.1 Association.

Founded in 1967, Busan Jugong is an automotive parts specialist supplying brakes, reducers, and other components to domestic and overseas finished car manufacturers. Domestically, it supplies key parts to Hyundai Motor and Kia Motors, while internationally, it provides brake parts for commercial trucks to companies such as Volvo and Scania.

Busan Jugong had been operating at a loss due to high manufacturing costs and financial burdens from massive borrowings. To overcome this, Busan Jugong achieved meaningful results by improving cost efficiency, including enhancing the casting process of its manufacturing lines. Additionally, the company has reduced interest expenses by repaying debt with approximately 25 billion KRW in cash secured from the sale of idle real estate this year.

A company representative stated, “We decided to proceed with the paid-in capital increase to improve liquidity by securing operating funds. We expect sales growth next year due to the surge in demand for automotive parts both domestically and internationally.”

He added, “We are also pursuing business diversification and structural improvement by exploring business partnerships with Sewon ENC, a major shareholder and participant in this capital increase. We have set a goal to reduce financial institution debt to less than half next year and are currently implementing detailed plans to achieve this.”