LMR Partners Invests $145 Million in HLB Group

Mezzanine Issuance Led by UBS

British global asset management firm LMR Partners is making a strategic investment of $145 million (approximately 206.9 billion KRW) in HLB Group. As HLB prepares to resubmit its liver cancer drug application and file for approval of its cholangiocarcinoma treatment, the inflow of capital from an overseas asset manager is seen as a signal that collaboration with global capital is entering a new phase.

On November 3, HLB announced that it will issue bonds with warrants (BW) worth $140 million. LMR Multi-Strategy Master Fund Limited will acquire these BWs.

HLB Life Science will issue exchangeable bonds worth $5 million to LMR Multi-Strategy Master Fund and LMR CCSA Master Fund. The shares to be exchanged are 145,900 common shares of HLB.

Of the total $140 million secured by HLB, 15% will be available immediately upon closing of the transaction. The remaining 85% will be deposited in HLB’s overseas escrow account and can be used only if the conditions for exercising the BWs are met. These funds are strictly designated for the clinical development and global commercialization efforts of its U.S. subsidiary, Elevar.

HLB is issuing the BWs as non-separable instruments with a unified annual interest rate of 5%, integrating both coupon and maturity interest rates. The warrants can be exercised starting one year after issuance. If the parity (the ratio of share price to conversion price) reaches at least 115% of the issue price, HLB has secured the right to request mandatory exercise.

This structure is designed to be mutually balanced: investors are assured of capital stability through the escrow arrangement, while HLB Group secures the right to exercise warrants based on increased corporate value and minimizes dilution for existing shareholders through the parity condition.

The put option can be exercised three years after the investment. HLB has now secured sufficient funding to continue its new drug programs with stability.

LMR Partners, established in 2009 and based in London, United Kingdom, is a global asset management firm with approximately $12 billion in assets under management (AUM). The company stated that this investment reflects a high assessment of the commercial potential of HLB’s core oncology pipeline, including liver cancer and cholangiocarcinoma treatments, which are expected to receive global approval next year.

This transaction was solely managed by global investment bank UBS. HLB Group has been increasing its foreign ownership ratio and expanding its global capital market network through ongoing overseas non-deal roadshows (NDRs). These efforts laid the foundation for securing the investment from LMR Partners.

This marks the first time global capital has been invested in HLB Group since its founding. It is significant in that the company’s drug development capabilities and achievements have been recognized by the international investment market. With the funds raised, HLB Group plans to ensure the operational stability of Elevar and to proceed with the U.S. FDA approval process for its liver and cholangiocarcinoma treatments, as well as the development of subsequent pipelines, according to the planned schedule without disruption, aiming to deliver tangible results.

Lim Changyoon, Vice Chairman of Investments at HLB Group, stated, “This transaction is the first inflow of foreign capital since HLB Group’s founding,” and explained, “It is a result of the recognition of the group’s innovative drug development potential in overseas markets.” He added, “Based on the funds raised, we will accelerate global approvals and market entry for our key pipeline, leading to an increase in corporate value.”