[Market Focus] Taekwang Industrial Rises on News of Exchangeable Bond Issuance Halt

As of 9:40 a.m. on July 4, Taekwang Industrial's stock price was up 6.03% from the previous day's closing price, trading at 1,091,000 won on the Korea Exchange. This appears to be due to the company's decision to halt the controversial exchangeable bond (EB) issuance process, as well as the passage of the revised Commercial Act the previous day.

Previously, on June 27, Taekwang Industrial announced that it would issue exchangeable bonds (EB) worth 318.6 billion won, using treasury shares equivalent to 24.41% of its outstanding shares as collateral. In response, the second-largest shareholder, Truston Asset Management, filed for an injunction to suspend the EB issuance. On July 1, the Financial Supervisory Service ordered a correction disclosure, stating that the counterparty to the EB issuance had been omitted.

On July 2, Taekwang Industrial announced, "We have decided to suspend all subsequent procedures related to the issuance of exchangeable bonds backed by treasury shares until the court's decision on Truston's injunction application is made." On July 3, the Korea Exchange issued a preliminary notice designating Taekwang Industrial as an unfaithful disclosure company due to failure to comply with fair disclosure obligations. On the same day, the revised Commercial Act, which includes the 'duty of loyalty to shareholders,' passed the National Assembly.