FSN Raises 7 Billion Won in Capital Increase... "Improving Financial Soundness Through CB Redemption"

FSN announced on the 18th through a disclosure that it has decided on a third-party allotment paid-in capital increase worth a total of 7 billion KRW targeting PureBio, Helixworks, TRV Partners, and others. The secured funds will be used for the repayment of convertible bonds (CB) and loans, aiming to continuously reduce the debt ratio.

FSN previously held a CB balance of up to 42 billion KRW due to business expansion and media rep business growth, but has successfully reduced the balance to about 17 billion KRW through continuous repayments. If additional repayments are made with the newly secured funds, the CB balance is expected to decrease to approximately 13.9 billion KRW, and the debt ratio, which stood at 239% at the end of last year, is also expected to improve.

Investors participating in the paid-in capital increase are known to have highly evaluated FSN’s brand win-win business performance and the potential for overseas market expansion. In fact, FSN achieved a record high annual consolidated sales of 265.6 billion KRW last year, with its subsidiary Boosters, which is in charge of the brand business, recording sales of 105.1 billion KRW and operating profit of 14.7 billion KRW, establishing itself as a core growth engine within the group.

Boosters’ growth trend is also remarkable this year. From the first quarter, which is classified as an off-season, sales growth is expected to reach about 360% year-on-year, driven by the overseas expansion of partner brands and securing new partnerships. Sales of 42 billion KRW and operating profit exceeding 8 billion KRW are expected in the first quarter alone. For March, monthly sales of 20 billion KRW and operating profit exceeding 4 billion KRW are anticipated.

Lee Sohyung, CEO of TRV Partners, and Park Hyunseok, CEO of Helixworks, who participated in this capital increase, are co-founders of Craver, a rapidly growing global K-beauty leading brand cultivation company. After actively entering overseas markets such as China, the United States, Japan, and Southeast Asia and driving the growth of the K-beauty industry, they sold the company to Gudai Global last year.

FSN’s subsidiary Boosters has maintained a long-standing relationship by partnering with Craver’s beauty brand Edenel. As the overseas market entry of its own and partner brands accelerates, they have been receiving various advice and support from CEO Lee Sohyung regarding global success know-how and networks. Additionally, PureBio, which participated in this capital increase, is a company focusing on health functional foods and pharmaceuticals research, including the patent for the Nokak tree, and is reportedly considering collaboration with FSN.

Lee Sohyung, CEO of TRV Partners, said, "I decided to invest because FSN’s advertising marketing capabilities, rapid growth in the brand business sector, and several successful cases present attractive early indicators. I am pleased to be able to work with an attractive company that has demonstrated stable growth in the domestic market for several years and has significant upside potential in overseas business."

FSN co-CEOs Seo Junggyo and Park Taesoon said, "We were able to successfully carry out this paid-in capital increase based on trust in FSN’s brand business high growth, global expansion potential, and future vision. The secured funds will be used for CB repayment and strengthening financial soundness, and we will continue to pursue multifaceted cooperation with investors."

They added, "We plan to continuously reduce the debt ratio through ongoing CB repayments, and since the company’s business is steadily growing centered on Boosters, we will do our best this year to overcome previous sluggishness and undervaluation to achieve performance growth and enhance shareholder and corporate value."