Current Stock Price 6,300 KRW... 30% Difference from Conversion Price
Increase in Market-Available Shares Due to Conversion Price Adjustment
The conversion price of Auto&'s 4th tranche convertible bonds (CB) has dropped to the minimum limit. Due to the adjustment of the conversion price, the number of shares that can be issued exceeded 13% of the total shares. Since the current stock price is below the conversion price, if the stock price does not rebound, the pressure for early redemption may also increase.
According to the Financial Supervisory Service's electronic disclosure system on the 14th, the conversion price of Auto&'s 4th tranche CB was lowered from 9,663 won to 8,697 won on the 8th. The reason for the adjustment is the decline in the stock price, which led to the adjustment of the conversion price. This is also the minimum adjusted price.
Auto& decided to issue CBs worth 15 billion won on August 4, 2023. This was to invest in new businesses such as the A2B (After-market To Before-market) product and service platform. From last year through 2025, they plan to invest 2 billion won, 8 billion won, and 5 billion won annually. The raised funds will be used to expand the A2B product and service system and to build service systems. Through this, they aim to increase participation from domestic aftermarket manufacturers and enhance the diversification of linked products for electric vehicles and software-defined vehicles (SDV)-based autonomous vehicles, as well as improve development competitiveness.
Auto& operates the 'A2B product and service platform,' which verifies the marketability and demand of various products through e-commerce, analyzes them with big data, and supplies verified products as before-market finished car brand products.
As the conversion price decreased, the number of shares that can be issued also increased. It rose from 1,552,312 shares at the time of initial issuance to 1,724,732 shares. This corresponds to 13.40% of the total 12,875,570 shares. Concerns about overhang (potential large-scale sell-off) have also increased.
Since the current stock price is significantly below the conversion price, investors may demand redemption. On the 13th, Auto&'s closing price was 6,300 won. The difference from the minimum conversion price is 38.04%. However, since the conversion request period and early redemption request period are still ongoing, the situation may change depending on future stock price trends. The conversion request period for Auto&'s 4th tranche CB is from August 8, 2023, to July 8, 2028. The early redemption request period starts from August 8 next year.
As of the third quarter of last year, Auto& recorded cumulative sales of 45.3 billion won and an operating loss of 800 million won. Sales increased by 33.9% compared to the same period last year, but losses continued.
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