Conversion Price at 30,000 KRW... Half the Market Value
CB Secures Both Expansion and Control
Kim Dongheon, CEO of Yuil Robotics, a specialist in robotic automation, acquired shares at half price by utilizing the call option on convertible bonds (CB). The stock price rose as the funds raised through the CB were invested in the expansion of a new factory, leading to evaluations that the company has achieved both external growth and strengthened control.
According to the Financial Supervisory Service's electronic disclosure system on the 25th, Yuil Robotics announced that it exercised the call option on the first series of CBs with a face value of 8.82077 billion KRW to CEO Kim and four company executives. The CB purchase price was about 9 billion KRW, which is the face value plus 2.0175%.
The conversion price per share for the first series of CBs is 29,568 KRW. Considering the call option exercise price, CEO Kim and others effectively acquired shares at 30,165 KRW per share. Given that Yuil Robotics traded at around 64,000 KRW the previous day, this price is more than 50% cheaper than the market price.
If these CBs are converted into shares, a total of 298,321 shares (2.53%) will be newly issued. CEO Kim was allocated CBs with a face value of 3.92077 billion KRW through the exercised call option. The number of shares convertible is 132,601 shares (1.13%).
The first series of CBs was issued in May 2023 with a volume of 33 billion KRW. The issuance targets included KB Securities, NH Investment & Securities, Korea Investment & Securities, Kiwoom Securities, and Rhinos Asset Management. At that time, the interest rate was set at 0%, making the issuance terms favorable to Yuil Robotics.
Additionally, to prevent dilution of control, a call option was attached allowing exercise up to 30% of the total volume. This option enables Yuil Robotics to directly redeem CBs or require transfer to a third party up to 9.9 billion KRW. The call option exercised this time corresponds to about 26% of the total CBs.
Yuil Robotics invested the 33 billion KRW raised in the new factory under construction in Cheongna International City, Incheon. Yuil Robotics is a company that develops industrial robots and supplies smart factory automation systems. Its main products include automation systems composed of industrial robots such as Cartesian robots, collaborative robots, multi-joint robots, and smart devices.
According to the company, the construction progress of the Cheongna new factory is currently at 95%, with completion expected in the first half of this year. The new factory spans a total of 5,000 pyeong, including a 2,000-pyeong office building and a 3,000-pyeong production building, which is more than 10 times larger than the existing 450-pyeong headquarters in Namdong Industrial Complex, Incheon. The production capacity of the new factory is estimated at 230 billion KRW. Through the CB, Yuil Robotics has effectively achieved both company expansion and stable control by management.
The market expects Yuil Robotics' performance to increase after the completion of the Cheongna new factory. Last year, Yuil Robotics recorded sales of 35.1 billion KRW and an operating profit of 400 million KRW. Sales increased by 19.4% compared to the previous year, and operating profit turned positive.
Han Songhyeop, a researcher at Daishin Securities, analyzed, “Yuil Robotics has established a favorable foundation for large-scale robot assembly and large orders through the expansion of the Cheongna new factory. Since SK Battery America invested about 37 billion KRW last year to become the second-largest shareholder and an SK board member joined, long-term synergy with SK Group is also expected.”
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