Chorokbaem Media "Capital Increase Finalized from Convertible Preferred Shares to Common Shares... Strengthening Financial Structure Soundness"

[Asia Economy Reporter Yoo Hyun-seok] Chorokbaem Media announced on the 17th that it has finally changed the type of shares for the third-party allotment paid-in capital increase decided in June from the existing convertible preferred shares to common shares. A total of 8,849,558 new common shares will be allocated to the largest shareholder, Chorokbaem Company.

A representative of Chorokbaem Media explained, "This decision to change to common shares is a measure to improve the company's financial structure amid concerns about deteriorating financial stability due to an expanded deficit last year caused by valuation losses on convertible preferred shares. To minimize the company's financial risk, the largest shareholder, Chorokbaem Company, decided in June to finally change the type of shares for the paid-in capital increase to common shares, and we plan to strengthen the financial structure and capital base."

According to K-IFRS (Korea International Financial Reporting Standards), convertible preferred shares are classified as financial liabilities and are measured at fair value. The fair value is greatly affected by the company's stock price volatility. Last year, Chorokbaem Media experienced a valuation loss of approximately 48 billion KRW on convertible preferred shares due to a short-term surge in stock price. Although this loss is recorded on the books without any actual cash outflow, it increases the financial burden.

A representative of Chorokbaem Media added, "In April this year, convertible preferred shares were also converted into common shares and returned to capital. Since there are no operational issues with the company, we plan to leap forward as a comprehensive content company through such financial structure improvement measures."

Meanwhile, with this change in the type of shares for the paid-in capital increase, Chorokbaem Media's capital will increase from the existing 82.1 billion KRW to 86.5 billion KRW. The payment date for the new common shares is scheduled for November 30, and the delivery date for the new shares is December 15.

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