Issued 33 Billion KRW CB in October Last Year... Raised Funds Deposited in Savings
Conversion Price 34,847 KRW, July Closing Price 56,600 KRW... 60% Yield
Investors of ToolGen's second tranche convertible bonds (CB) are converting their bonds into shares. This is interpreted as ToolGen's stock price surpassing the CB conversion price just over a year after issuance. CB investors are expected to gain returns exceeding 60%.
According to the Financial Supervisory Service's electronic disclosure system on the 8th, ToolGen announced that the conversion rights of the second tranche CB will be exercised between the 4th and 5th of this month. A total of 20.55 billion KRW worth, equivalent to 589,712 shares, is scheduled to be listed on the 20th of this month. This accounts for 7.43% of the total issued shares of 7,938,458.
The conversion price of the second tranche CB is 34,847 KRW. The closing price of ToolGen on the previous day was 56,600 KRW. If ToolGen's stock price continues until the CB listing date, investors are expected to achieve a return of approximately 62.42%. This is the result ToolGen has achieved just over a year after issuing the second tranche CB.
Founded in 1999, ToolGen is a gene-editing technology company. Gene-editing technology can modify traits by correcting the nucleotide sequences of DNA that contain genetic information related to specific traits.
On October 31 last year, ToolGen issued CBs worth 33 billion KRW. The nominal and maturity interest rates are 0% and 1%, respectively. At that time, ToolGen stated that all proceeds from the issuance would be used for operating funds, including costs for regulatory review and research and development (R&D). However, according to ToolGen's semi-annual report for the first half of this year, the second tranche CB has not yet been used and remains deposited in banks as cash or equivalents.
The conversion request period for the second tranche CB is from the 2nd of this month until October 2, 2028. In other words, the request was made immediately upon the conversion period's commencement. This stock conversion request is attributed to the robust stock price. At the time of issuance in late October last year, ToolGen's stock price was around 33,000 KRW. However, it showed an upward trend this year, reaching an intraday high of 110,000 KRW in March, then declining to the 50,000 KRW range by September. Since then, the stock price has been steadily maintained in the 50,000 KRW range. It is interpreted that the ongoing patent litigation related to ToolGen's gene-editing technology 'CRISPR' influenced this. Although the stock price has fallen nearly half from the high closing price of 97,200 KRW on March 21 this year, it remains at a high level compared to the conversion price.
Meanwhile, after this conversion, the remaining amount of the second tranche CB is 12.45 billion KRW, equivalent to 357,276 shares. This accounts for 4.5% of the total issued shares.
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