[Public Companies at a Crossroads] JW Biotech, Another Delay in Capital Increase... Penalty Risk 'Red Light' ⑥

[Asia Economy Reporter Jang Hyowon] The 12.1 billion KRW paid-in capital increase of KOSDAQ-listed company GW Vitec has been delayed again. It has been continuously postponed for about five months since the resolution in January. If the payment continues to be delayed like this, there is a possibility of receiving penalty points from the Korea Exchange.

According to the Financial Supervisory Service's electronic disclosure on the 21st, GW Vitec announced that it will change the payment date of the 12.1 billion KRW third-party allotment paid-in capital increase, which was due by that day, to July 20.

Previously, on January 25, GW Vitec resolved a third-party allotment paid-in capital increase worth 15 billion KRW. The purpose was to raise 10 billion KRW for operating funds and 5 billion KRW for other funds. At that time, the new share issuance price was 2,000 KRW, and the payment deadline was set for February 23.

The issuance target was ‘The Road 1st Association’ (The Road 1ho Johap). If the paid-in capital increase was completed, The Road 1st Association would acquire a total of 7.5 million shares, becoming the largest shareholder of GW Vitec with an 18.7% stake. The largest shareholder of The Road 1st Association was Kwon Soon-gil, holding 66.7%.

However, when the payment date of February 23 arrived, GW Vitec issued a corrected disclosure. It postponed the payment date to March 25 and stated that 5 billion KRW out of the 15 billion KRW capital increase would be received as a performance bond. At that time, the largest shareholder and CEO of The Road 1st Association had changed to Yang Jaewon, CEO of GW Vitec.

Later, as the payment date approached on March 21, GW Vitec postponed the payment date again to May 20. It also disclosed that only 500 million KRW out of the 5 billion KRW performance bond was paid on February 28. The Road 1st Association, led by CEO Yang Jaewon, failed to secure the payment funds.

By around May 20, GW Vitec issued another corrected disclosure, postponing the payment date to June 20. This time, the capital increase amount was adjusted to 12.1 billion KRW, and the new share issuance price was lowered from 2,000 KRW to 1,350 KRW. This was due to a significant drop in stock price caused by the resale of bonds with warrants (BW).

Including this latest delay, the paid-in capital increase has been postponed a total of four times. This time, the issuance price was lowered from 1,350 KRW to 842 KRW, which is still higher than the current stock price. As of that day, GW Vitec’s stock price was 839 KRW.

Due to multiple delays in the paid-in capital increase payment, the risk of penalty points is increasing. For KOSDAQ-listed companies, if the payment date is delayed by more than six months after the resolution of the paid-in capital increase, penalty points are imposed.

However, the financial scale of the capital increase target announced this time is not confirmed. GW Vitec changed the target from the previous The Road 1st Association to the Korea Pharmaceutical Technology Value Fund Association when changing the payment date. This association was established in January and its financial status has not been disclosed.

The CEO and largest shareholder of this association is Kim Sudong, chairman of the board of directors at Ajou University Advanced Medical Bio Research Institute, holding 33.33% of the shares. However, since the actual investment amount has not been disclosed, it is unknown how much Chairman Kim has invested.

GW Vitec was inquired about this but did not respond.