Westrise Decides Voluntary Lock-up to Resolve Overhang Issue

KOSDAQ-listed company WestRise announced on the 9th that it has signed a six-month lock-up agreement with the underwriters of its 22nd convertible bonds (CB).

On the 28th of last month, WestRise entered into a CB sales contract with J&YD 1st Association and Oncidium Consortium. These CBs will be converted on the 16th, resulting in 6,747,069 new shares being newly listed. J&YD 1st Association and Oncidium Consortium have voluntarily agreed with the company to prohibit the sale of all these shares for six months.

The agreement also includes a mandatory clause that if the associations violate the lock-up period and sell the shares, they must return a significant portion of the sales proceeds to the company.

The company stated, “This is a self-regulatory effort to resolve the overhang issue caused by CB conversion, which has been a major cause of the recent stock price decline in the KOSDAQ market.”

A representative of the associations explained, “With confidence in the future performance prospects of Human Wellness (the largest shareholder of Motiva Korea), which recently acquired WestRise, we chose a six-month voluntary lock-up. Since the six-month lock-up also resolves the overhang issue, which is a negative factor in the market, we intend to use this as an opportunity to promote the company.”