ITCEN CTS Issues KRW 5 Billion CB to Largest Shareholder ITCEN Global

ITCEN CTS said on the 1st that it will raise funds by issuing KRW 5 billion worth of convertible bonds to its largest shareholder, ITCEN Global. The board of directors decided to issue KRW 5 billion of the 4th unsecured private convertible bonds with warrants, and the payment date is September 16.

ITCEN CTS plans to use the KRW 5 billion it is raising this time not for new business investment or operating funds, but to repay existing borrowings. The company said the entire amount raised will be used to partially repay general-purpose loans from financial institutions.

The company plans to reduce financial liabilities and improve its financial structure through this move. It also plans to strengthen financial stability.

In this transaction, ITCEN Global, the parent company and largest shareholder, will underwrite the entire CB. The company cited the fact that its largest shareholder, ITCEN Global, is directly participating as the underwriter as the significance of this financing.

ITCEN CTS said it chose a structure in which its largest shareholder directly underwrites the convertible bonds (CB). The company explained that this would replace financing dependent on outside investors with a structure in which the largest shareholder directly injects funds, thereby preemptively addressing potential overhang risks by blocking concerns that shares may hit the market upon future conversion requests, and helping stabilize supply and demand for the stock from the perspective of shareholders and investors.

The company said it plans to use the funds raised this time for stable repayment of borrowings. It explained that this carries the meaning of the largest shareholder participating in the improvement of the financial structure.

The coupon rate for this CB is 0%, the maturity yield is 2%, and the maturity date is September 16, 2028. The conversion price is KRW 6,109 per share, and the number of shares to be issued upon conversion is 818,464, equivalent to 6.76% of the company's total shares currently outstanding. The conversion request period is from September 16, 2027, to August 16, 2028. The company said that by repaying this debt, it plans to reduce the burden of financial liabilities and financial expenses and focus on strengthening its core business competitiveness and enhancing corporate value on the basis of a stable financial foundation.

However, the company said there is a possibility of changes in ownership stakes due to the issuance of CBs to the largest shareholder. It added that whether conversion takes place will depend on future conversion conditions and market conditions such as the stock price, and said it is difficult at this stage to determine ownership changes on the assumption of conversion.

An ITCEN CTS official said the purpose of this financing is to repay the company's borrowings and improve its financial structure, and that the entire amount raised will also be used for debt repayment. The official added that the new funds are not intended for external outflow purposes and are not for any specific investment purpose.

The company said it is focusing this financing on reducing financial liabilities and establishing a financial foundation for stable future business operations. An ITCEN CTS official said the company will pursue stronger business competitiveness and continued enhancement of corporate value based on financial stability, and will work to connect that to improved value for existing shareholders.

Source: IT DAILY · Yang Seung-gap
Original: https://www.itdaily.kr/news/articleView.html?idxno=241338

References

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