KRPN, Audit Report 'Unqualified'... Dispels Concerns Over Management Stock Status

[Asia Economy Reporter Jang Hyowon] KRPN announced on the 20th that it has submitted an audit report with an "unqualified" audit opinion.

Last year, KRPN successfully raised 15 billion KRW in capital from Cormon Partners. As a result, the pre-tax loss from continuing operations recorded 41.2%, which is less than 50% of equity capital, thereby escaping the designation criteria for management oversight. Based on the secured funds, the company acquired convertible bonds worth 15 billion KRW before maturity, significantly lowering its debt ratio and improving its financial structure.

At the end of last year, KRPN succeeded in developing Korea's first bio marine fuel and recently completed factory expansion to actively supply bio marine fuel. Since the introduction of the IMO2020 regulation on January 1, shipping companies are required to reduce the sulfur content in marine fuel to 0.5% or less to prevent air pollution.

To comply, they must either blend bio marine fuel with high-sulfur fuels such as bunker fuel oil or use low-sulfur fuel oil. Because blending bio marine fuel with existing fuels is more cost-effective than using low-sulfur fuel oil alone, global demand for bio marine fuel is rapidly increasing, while supply remains limited, indicating a bright market outlook.

KRPN completed the expansion of its eco-friendly bio marine fuel production facility using its proprietary SYN-TG (Synthetic Triglyceride Process) technology in February. This increased production capacity to 30,000 tons, a fivefold increase from before, enabling full-scale business expansion.

The newly developed SYN-TG technology uses low-cost raw materials (high acid value oils), which is expected to lead to more than triple sales growth and profitability turnaround. KRPN’s SYN-TG technology can produce high-viscosity biofuels with a cetane number below 2.5, allowing control of low-temperature fluidity of the fuel. The market regards this as the only case overcoming the limitations of biofuels used as marine fuel.

A company official stated, “Despite efforts to improve core business through restructuring and proactive investment due to management oversight issues, the company’s value has been significantly discounted. With the resolution of concerns regarding management oversight designation, the company’s fundamental growth potential can be highlighted.”

He added, “Not only are the company’s performance prospects positive, but with improved financial structure and reduced debt ratio, it is now possible to raise funds for further facility expansion and strengthening eco-friendly energy businesses. We will leap forward as an eco-friendly bio energy company creating high added value through our differentiated SYN-TG process, and this year could be the first year of transformation.”

This content was produced with the assistance of AI translation services.