Hanju ART, Increasing CB Volume Amid Declining Stock Prices

4th Tranche CB Conversion Price Drops to 2,877 KRW, Lowest Ever...
"Up to 24% of Total Shares Could Be Released"
Additional 12 Billion KRW Worth of CBs Remain in 2nd and 5th Tranches

The conversion price of Hanju ART's 4th tranche convertible bonds (CB) has dropped to its lowest level. With the CB conversion price hitting a record low, there is a high possibility that more than 20% of the total shares will be released into the stock market.

According to the Financial Supervisory Service's electronic disclosure system on the 3rd, Hanju ART announced on the 31st of last month that the conversion price of the 4th tranche CB was lowered from 4,109 KRW to 2,877 KRW. This is the lowest conversion price.

Hanju ART issued the 4th tranche CB worth 10.1 billion KRW last April. The coupon rate and maturity interest rate are 2.0% and 4.0%, respectively. The conversion request period is from June 27 this year to May 27, 2027. Due to the adjustment of the conversion price, the number of convertible shares increased from 2,458,018 shares to 3,510,601 shares. This is a large volume equivalent to 23.73% of the total issued shares of 14,793,621.

Not only the 4th tranche but also the 2nd and 5th tranches remain, so the volume convertible into shares is expected to increase further. As of the third quarter of last year, excluding the 4th tranche, the remaining CB balance issued by Hanju ART amounts to 12.1 billion KRW (7 billion KRW for the 2nd tranche and 5.1 billion KRW for the 5th tranche).

However, since the company has acquired some of the issued CBs, the volume that may come to the market could change depending on future handling methods.

Hanju ART issued the 2nd tranche CB worth 9 billion KRW in June 2023 and acquired 8 billion KRW before maturity in three rounds last May and September. Among these, 2 billion KRW was converted into shares, and 2 billion KRW was resold. The remaining balance is currently 7 billion KRW. The conversion request period for this CB is from June 16 last year to May 16 next year.

The 5th tranche, issued last July with a value of 5.1 billion KRW, is similar. Hanju ART acquired 1.5 billion KRW of the 5th tranche CB last December. The conversion request period for this CB is from July 19 this year to June 19, 2029. The 4th tranche was also acquired for 3 billion KRW before maturity last December.