Labgenomics announced on the 11th that the interest rate on its 4th convertible bonds (CB) has been lowered from 6% to 2.5%. With this reduction, the total guaranteed interest at maturity is expected to significantly decrease from 8.1 billion KRW to 2 billion KRW, improving profitability prospects.
The company stated, “To overcome the sales gap caused by COVID-19 diagnostic kits and enhance the company’s competitiveness, we agreed to lower the interest rate with Luhagalacticos, the CB issuance recipient and largest shareholder. With the substantial reduction in total guaranteed interest, the burden of interest expenses has eased, enabling an improvement in the financial structure.”
To implement this interest rate reduction, the company will provide Luhagalacticos with a cash collateral of 39.5 billion KRW. As of the first quarter, Labgenomics’ cash equivalents, including short-term financial instruments, amounted to approximately 100 billion KRW, so the company explained that the impact of this cash collateral on the financial structure is very limited.
A Labgenomics representative said, “To minimize the sales gap caused by COVID-19, we are actively pursuing mergers and acquisitions strategies that open various possibilities and create synergies. Based on abundant cash and a solid financial structure, we will continue to enhance corporate value.”
Meanwhile, Labgenomics acquired QDx Pathology, a U.S. top 100 clinic lab, in August last year. The company is exploring various avenues to discover new businesses with cash-generating capabilities and future growth potential.
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