J's Co Holdings Reloads 40 Billion Won Ammunition... Establishing Foundation for Financial Structure and Performance Improvement

JSCO Holdings announced on the 25th that it will secure financial soundness and establish a foundation for a performance turnaround through a large-scale fundraising by issuing convertible bonds (CB) worth 40 billion KRW.

JSCO Holdings disclosed on the 20th that it will issue CBs worth 40 billion KRW to Faust 1st Corporation. Leading Investment Securities will take the lead in this fundraising, with its affiliates and financial investors participating jointly through a special purpose company (SPC).

Of the funds raised, 33 billion KRW will be used to repay principal and interest on existing loans, and 7 billion KRW will be used for raw material purchases and operating funds for overseas subsidiaries.

Last year, JSCO Holdings’ borrowings gradually increased due to investment in the Philippine nickel mine development project, resulting in high financial expenses. The company plans to focus on improving its financial structure by repaying existing borrowings with the raised funds and significantly reducing financial costs. Accordingly, the debt ratio, which was about 94.97% as of the third quarter, is expected to improve to below approximately 75%.

A company official explained, “The 40 billion KRW secured this time will be fully used for repaying existing borrowings, repurchasing convertible bonds, repaying financial liabilities, and operating funds. Although the commercial mining schedule of the nickel mine development project has been somewhat delayed compared to the original plan, causing an increase in borrowings and financial cost burdens, repaying the borrowings with the secured funds is expected to reduce costs and significantly improve the financial structure.”

Since 2022, JSCO Holdings has been preparing for a second leap by focusing on overseas resource development projects, including discussions on the distribution and sale of nickel ore with domestic and foreign raw material-related companies, after starting the nickel mine development project in the Mindanao region of the Philippines. Currently, the Philippine mine development project is in the final stages of construction for facilities necessary for nickel ore mining and transportation, including roads, stockyards, employee accommodations, and offices. After completing the remaining pier-related construction, full-scale commercial mining is expected to begin in January 2025.

Additionally, JSCO Holdings plans to strengthen the Philippine nickel mine development project by securing additional funds through the resale of CBs. The company recently acquired CBs worth about 29 billion KRW before maturity and decided to sell 21.5 billion KRW worth of self-convertible bonds. The proceeds from the sale will be reinvested in the mine development project to accelerate the timing of ore distribution and sales and will be used for raw material purchases related to the steelmaking business.

A company representative said, “Although there are concerns from the market and shareholders about the large-scale fundraising, we decided to issue CBs to reduce unnecessary costs and secure future growth businesses and foundations for growth. We will continue efforts to improve shareholder value through visible results by establishing a stable financial and business foundation, including improving the debt ratio and reducing interest burdens.”