Issuing New Shares to Raise Funds for Ukraine Business
Spotlight on Trump Ex-President Beneficiary Stocks
Steady Preparation for Reconstruction Projects Locally
Ascon manufacturer SG, which successfully raised funds through a rights offering last month, has seen its stock price surge this month. This is due to growing expectations for Ukraine's reconstruction as former U.S. President Donald Trump is increasingly likely to win the presidential election. SG plans to establish a local subsidiary to participate in Ukraine's reconstruction projects using the funds raised from issuing new shares.
According to the financial investment industry on the 29th, SG's stock price rose 128% this month from 1,286 KRW at the end of last month to 2,930 KRW. Compared to the rights offering new share issuance price of 1,061 KRW last month, it increased by 176%.
Earlier, SG's board of directors resolved to conduct a rights offering on April 5. They planned to issue 30 million new shares to raise funds for facility investments, debt repayment, and acquisition of securities from other companies. According to the plan, subscription was accepted from existing shareholders over two days from the 18th to the 19th of last month. The subscription rate recorded was 101.6%, completing the fundraising. The payment date was the 27th of last month, and the new shares were listed on the 9th.
An SG representative explained, "The funds secured through the rights offering will be used to acquire a local Ascon plant in Ukraine and to repair aging facilities at domestic plants." They expect to reduce interest expenses by repaying part of the amount borrowed from financial institutions and to improve financial soundness.
SG is currently promoting reconstruction projects with the Ukrainian provincial government and local companies. Recently, it signed a lease contract for an Ascon plant site in Oleksandrija city, Kirovohrad province, Ukraine. SG is preparing to produce Ascon locally in Ukraine. Before full-scale reconstruction projects, they will conduct test paving with Eco Steel Ascon on roads far from the eastern region where direct combat with Russia is ongoing. After passing the road paving quality test, Eco Steel Ascon can be expanded to major roads in Ukraine, including about 230 km of highways. Eco Steel Ascon is Ascon made from slag, a steelmaking byproduct, instead of the conventional raw material, aggregate (stones).
They have agreed to receive steelmaking slag, the raw material for Eco Steel Ascon, from a Ukrainian steel company, a steel powerhouse. They signed a contract for entrusted production of Eco Steel Ascon with DS Prom Group LLC, located in the capital Kyiv.
Daejun Kim, a researcher at Korea Investment & Securities, said, "Interest in Trump beneficiary stocks is growing along with expectations of former President Trump's election victory," adding, "The Ukraine reconstruction theme is rapidly emerging." He added, "Former President Trump, who opposes support for Ukraine, has stated that if re-elected, he will end the Russia-Ukraine war before taking office in January next year," and "Ukraine is also positive about a peace agreement with Russia."
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