[Market Focus] KR Motors Rises on Paid-in Capital Increase for Largest Shareholder

As of 9:30 a.m. on July 30, KR Motors' stock price on the KOSPI market is trading at 653 won, up 29.82% from the previous day's closing price. This surge appears to be due to heightened expectations for improved financial structure after the company announced it would convert the amount borrowed from its largest shareholder into equity through a paid-in capital increase.

On July 29, KR Motors disclosed a third-party allotment paid-in capital increase to convert approximately 10.8 billion won borrowed from LVMC Holdings and 2.3 billion won borrowed from Oh Seyoung, the largest individual shareholder of LVMC Holdings, into equity. LVMC Holdings and Oh Seyoung currently hold 36.88% and 10.2% stakes in KR Motors, respectively, making them the largest shareholders.

The company also announced it would issue a total of 21 billion won in bearer private convertible bonds?13 billion won and 6 billion won, respectively?to Lapinus Concordia No.1 Private Equity Investment Partnership, a special purpose company (SPC) established by private equity fund (PEF) manager Kiwoom FNI.

KR Motors, a motorcycle manufacturer, is the only domestic maker that possesses its own high-displacement engines ranging from 250cc to 700cc. The company has focused on selling low-displacement models (125cc and below) in the domestic market, while pursuing a sales strategy centered on high-displacement models (250cc and above) in overseas markets such as the United States, South America, Europe, and Australia. Since 2010, however, the company has struggled as low-cost models from China and Taiwan have taken over more than 85% of the domestic market.