Ameritz, Three Delayed CB Issuances... Acquirer's Funding Capability Unclear

Payment date continuously delayed... June 11 → November 29
Corporation led by former CEO of delisted company acquires CB

The issuance of 7.5 billion KRW convertible bonds (CB) by Amerridge, a KOSDAQ-listed company, continues to be delayed. With the funding status of the corporate entity designated as the bondholder remaining unclear, attention is focused on whether the CB issuance will be successfully completed.

According to the Financial Supervisory Service's electronic disclosure system on the 9th, Amerridge announced a change in the payment date for the 29th series CB worth 7.5 billion KRW to November 29. This CB was decided to be issued on May 27, with the original payment date set for June 11.

Amerridge postponed the payment date once from June 11 to August 20. When August 20 arrived, the payment date was again changed to September 5. At that time, the issuance target was changed from 'LB Corporation' to 'Gyeongsan Value.' The conversion price was also adjusted from the original 1,537 KRW to 1,981 KRW.

The initial issuance target, LB Corporation, was a newly established company with a capital of 10 million KRW at the end of last year, raising doubts in the market about its ability to raise funds. At that time, LB Corporation also participated in Amerridge's 2 billion KRW third-party allotment capital increase but gave up on the CB and only took part in the capital increase. The new share issuance price for the capital increase was 1,458 KRW, which was lower than the CB price.

Gyeongsan Value, which took over from LB Corporation, is also a company whose financial strength is questionable. Gyeongsan Value is a real estate consulting firm established in April 2022 with a capital of 20 million KRW. It had no sales last year and is presumed to be a paper company with no actual business operations.

The CEO and largest shareholder of Gyeongsan Value is Kim Seong-moon. Kim is known as the actual shareholder of Miltop, which acquired the management rights of Melpas, a company delisted last year. Miltop is a premium shaved ice specialty brand that opened its first store in Apgujeong Hyundai Department Store. The largest shareholder is Yoojoy Green Holdings, which is 100% owned by Kim Seong-moon.

After the management rights of Melpas were transferred to Miltop, the company pursued resource development projects but became embroiled in a management dispute. During this process, lawsuits including accusations of embezzlement and breach of trust by the management were filed, leading to a litigation battle and ultimately resulting in the Korea Exchange designating Melpas for a substantive review of listing eligibility.

Additionally, Kim served as an inside director at Storm E&F, which was delisted in 2011, and was sued on charges of embezzlement and breach of trust. At that time, former CEO Hong Young-gi filed a lawsuit claiming that CEO Lee Jun of Storm E&F, Director Kim Seong-moon, and Kim Seong-man had issued five promissory notes totaling 45.3 billion KRW without any claims against Hong.

Meanwhile, amid delays in new fundraising, Amerridge's performance is on a decline. In the first half of this year, Amerridge recorded sales of 11.6 billion KRW and an operating loss of 7.5 billion KRW. Compared to the same period last year, sales decreased by 40%, and operating losses expanded by 83%.

Amerridge was formerly known as 'NewPride' and was a stock that experienced sharp fluctuations driven by themes in the KOSDAQ market. The stock price rollercoastered as the company claimed to operate duty-free shops in China and businesses related to the Korean Wave, but it was eventually suspended from trading in March 2020 after receiving a disclaimer of opinion from auditors. After capital reductions and fundraising efforts, trading resumed in September 2022. Currently, the company operates in clothing distribution and cannabis businesses.