Hanul Semiconductor Completes KRW 12 Billion CB Payment... Full Disclosure of Fund Usage and Investment Structure Resolves Financial Risks

Hanul Semiconductor announced on January 2 that it has resolved the key uncertainties raised by the market by completing the payment for the third and fourth tranches of convertible bonds (CB), each worth 6 billion KRW. In particular, the company clarified the previously unspecified use of funds as being for the acquisition of securities of another company, and fully disclosed the investment target, amount, and results of the external evaluation.

The funds raised through the CBs will be used to acquire securities related to the K Partners No.1 Investment Association. The company received an external accounting firm’s assessment for the acquisition price of 12 billion KRW, which concluded that there were no issues with the appropriateness of the transaction.

The investment structure has also become clear. The composition of contributions to the Global Lowell Association, the CB subscriber, has been finalized, with the largest contributor identified as the JK New Technology Investment Association No.7. As this correction was made following the completion of contributions, it has also addressed the market’s most sensitive question: “Who actually provided the funds?” The previously raised concerns about the source of funds and the formal nature of the association have been effectively resolved through this disclosure.

The conversion price is set at 2,041 KRW, and the number of shares to be issued upon conversion is approximately 2.94 million, representing about 8.2% of the existing shares. Conversion requests can be made after the end of 2026. Any downward adjustment of the conversion price is limited to 70% of the initial conversion price, structurally preventing excessive stock dilution. Investors are granted an early redemption right, ensuring a minimum annual return of at least 1%, but from the company’s perspective, the structure also allows for cash flow management until maturity, meaning it is not unilaterally disadvantageous.

Securities industry experts see the significance of this revised disclosure not as a mere “formal supplement” but as a resolution of the risk framework. This is because the uncertainties surrounding the use of funds, the identity of investors, and the appropriateness of the transaction-which had weighed on the market more than the CB issuance itself-have all been addressed simultaneously. A securities firm official commented, “The most important aspects of CB issues are the structure and purpose, not the size. This disclosure has removed uncertainties, significantly alleviating factors that had been weighing on the stock price.”

The company stated, “This disclosure is significant in that it has converted the controversial CBs into investment CBs with a transparent structure. The very fact that we have formally clarified issues that were previously in the area of market suspicion will serve as a key variable in determining the direction of future growth.”