Director Jiho Park of HuSteel's CNCPive Acquires 5 Billion KRW Convertible Bonds from Synergy Innovation
CNCPive is a Company with Total Debt of 37 Billion KRW and Complete Capital Impairment... Funding Sources Unclear
Park Ji-ho, the second son of Shin An Group Chairman Park Soon-seok and director of Hu Steel, is set to invest in convertible bonds (CB) of Synergy Innovation, a KOSDAQ-listed company. As Shin An Group is expected to be succeeded by two pillars?eldest son Park Hoon, CEO of Hu Steel, and second son Director Park?attention is focused on Director Park’s investment moves.
According to the Financial Supervisory Service’s electronic disclosure, Synergy Innovation announced on the 12th that it will issue convertible bonds worth 39 billion KRW. The bonds have a 0% coupon rate, a 1% maturity interest rate, and a conversion price of 2,799 KRW per share. This is 4.8% lower than the previous day’s closing price of 2,940 KRW. The minimum adjusted conversion price due to market price decline is 1,960 KRW. Once payment is completed on the 22nd, the bonds can be converted into shares starting one year later.
The purpose of issuing the CB is to raise 30 billion KRW for acquiring securities of other companies and 9 billion KRW for other funds. Synergy Innovation plans to acquire a new company with the raised funds. Currently, it is proceeding with the sale of its subsidiary M-ITech, which accounts for a major portion of consolidated sales. Since the sale will be completed soon, performance defense is necessary. A Synergy Innovation official stated, “We are pushing for the sale of M-ITech, which accounts for a large portion of sales, and plan to acquire a company that can generate earnings.”
Among the CB subscribers, a notable participant is ‘CNC Five.’ CNC Five is a personal corporation wholly owned by Park Ji-ho, the second son of Shin An Group Chairman Park Soon-seok and director of Hu Steel. CNC Five will take up 5 billion KRW worth of Synergy Innovation’s CB.
As of the end of last year, CNC Five had zero sales, total assets of 37 billion KRW, and total liabilities of 37 billion KRW, making it a fully capital-deficient company. There is no record of capital increase this year either, so it is presumed that this CB acquisition will be financed through borrowing. The source of the funds is unclear.
Shin An Group is a mid-sized conglomerate ranked around 60th in the business world, engaged in construction, golf and resorts, manufacturing and services, finance, and hotels. As of the end of last year, it has 21 official affiliates. At the top of Shin An Group’s governance structure is ‘Shin An,’ wholly owned by Chairman Park Soon-seok. Chairman Park directly holds or controls most of the affiliates’ shares through Shin An.
The market expects that as Chairman Park’s retirement approaches, Shin An Group’s governance will be reorganized around his two sons. It is anticipated that eldest son Park Hoon, CEO of Hu Steel, will take charge of construction, manufacturing, and golf businesses, while second son Park Ji-ho, director of Hu Steel, will inherit finance-related operations.
In fact, Director Park previously served as CEO of Shin An Savings Bank (now Baro Savings Bank), a key financial affiliate of Shin An Group. However, he was involved in a stock manipulation case in 2004, and in 2013, an illegal loan incident occurred at Shin An Savings Bank, leading to a dismissal recommendation sanction by the Financial Supervisory Service, resulting in his withdrawal from frontline management.
Nonetheless, Director Park still holds 100% of the shares in Baro Asset Management and is the second-largest shareholder of Kakao Pay Securities. He is reportedly currently working as the head of the investment finance group at Kakao Pay Securities.
This is not the first time CNC Five has appeared in the market. Shin An Capital and Baro Asset Management invested in POSLink (now CNT85), a KOSDAQ-listed company under trading suspension, and issued a large-scale CB in 2021. CNC Five received a CB put option (call option) at that time. This structure allows earning CB profits with only a small contract deposit and no CB investment. However, the call option was canceled ahead of the Korea Exchange’s review for resuming trading.
Meanwhile, regarding Director Park’s recent CB investment, a Synergy Innovation official explained, “Director Park participated in the CB investment personally and has no personal or business relationship with the management or others.”
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