[Listed Company at a Crossroads] Ewon Comfortech ① Preparing for CB Repayment Amid Sluggish Share Price... 3 Billion Won Capital Increase

Continued Large-Scale Losses and Declining Share Price
Over 10 Billion Won in Unpaid Convertible Bonds Remain

KOSDAQ-listed company Ewon Comfortech is conducting a capital increase worth 3 billion won to prepare for the repayment of its convertible bonds (CB). After recording large-scale losses and seeing its share price fall below the CB conversion price, the company appears to be securing cash through the capital increase.

According to the Financial Supervisory Service's electronic disclosure system on November 6, Ewon Comfortech decided on November 4 to carry out a third-party allotment capital increase worth 3 billion won. The purpose of the funds is debt repayment. The company aims to acquire the 10th CB, which was issued on November 6 of the previous year, before its maturity.

At the time, Ewon Comfortech issued the 10th CB to repay the 9th CB. The 9th CB had also been issued to repay the previously issued 2nd CB and other borrowings. The company has been repaying borrowings with new borrowings, and is now resorting to a capital increase for repayment. This is because Ewon Comfortech's business performance cannot cover its debts.

Ewon Comfortech is a primary vendor supplying automotive seat interior products to Hyundai Motor, Kia Motors, and Hyundai Mobis. While the company has consistently posted operating profits from its core business, it has recorded significant net losses every year due to investment losses and other factors. As of the end of last year, Ewon Comfortech reported sales of 52.5 billion won, operating profit of 2.5 billion won, and a net loss of 21 billion won. The cumulative net loss for the first half of this year was 4.8 billion won.

The 10th CB is also secured by collateral. Ewon Comfortech provided all of its land and building assets located in North Jeolla Province, as well as 1,699,615 shares of Nasdaq-listed Zura Bio Limited, as collateral to bondholders such as SangSangin Savings Bank.

The conversion price of the 10th CB is currently 1,132 won. From this day, both stock conversion and put option (early redemption right) exercises have become possible. However, Ewon Comfortech's share price continues to decline and has recently been trading in the 1,000-won range. It is difficult to expect a profit from stock conversion under these circumstances. As a result, it is interpreted that the company decided on the capital increase to prepare for the exercise of the put option.

In addition to the 10th CB, Ewon Comfortech still has several CBs that have not yet been repaid. These include the 8th CB worth 6.4 billion won and the 9th CB worth 3.08 billion won. The conversion prices for these two CBs are 5,126 won and 1,217 won, respectively, making it unlikely that they will be converted into shares. In fact, there have been continuous early redemption requests from bondholders for the 9th CB.

Furthermore, the maturity date for the 8th CB is approaching on March 6, 2026, making preparations for repayment urgent. Although there is a special agreement allowing repayment in kind with Zura Bio shares for this CB, it is effectively expected that cash repayment will be unavoidable.

When the 8th CB was issued, Ewon Comfortech entered into a special agreement with creditors allowing repayment in kind with Zura Bio shares after the company’s Nasdaq SPAC listing. The repayment price in shares is set at 10 dollars per share. However, the current price of Zura Bio shares is 3.45 dollars.

Meanwhile, the recipient of Ewon Comfortech's latest third-party allotment capital increase of 3 billion won is its largest shareholder, Rain Partners. The issue price for the new shares is 886 won, and the payment date is June 30, 2026.