4 Trillion Won Valued WCP, Listing Variable is 'CB Litigation'

Second-Largest Electric Vehicle Battery Material Company
Financial Stability and Growth Potential Secured
'San-eun-Ibest' Legal Dispute Under Close Watch

[Asia Economy Reporter Park Jihwan] Electric vehicle battery separator manufacturer WCP has officially begun the process of entering the stock market. The market is paying attention to WCP as the second-largest electric vehicle battery material company in terms of market share following SK Innovation’s SKIET, noting not only its financial stability but also its potential for future business growth. However, considering the ongoing litigation issue since last year involving KDB Industrial Bank and the Ebest-BEV New Technology Association (Ebest Association) regarding WCP’s convertible bond (CB) contract, the outcome of the stock exchange listing review cannot be viewed optimistically.

According to the investment banking (IB) industry on the 16th, WCP filed a preliminary review application for listing on the KOSDAQ with the Korea Exchange the day before. The number of shares planned for listing is 34,009,698. Of these, 9 million shares, accounting for 26.4%, will be offered to the public. Considering that the listing review usually takes 2 to 3 months, it is expected that the preliminary review will be passed as early as April. KB Securities and Shinhan Financial Investment are acting as joint lead managers.

WCP’s post-listing corporate value is expected to reach at least the 4 trillion won level. This is due to WCP’s high market share and steep performance growth based on its polymer film manufacturing technology. In 2020, WCP recorded sales of 111.9 billion won and operating profit of 9.8 billion won. Sales increased by 221.6% from 34.8 billion won the previous year. During the same period, operating profit turned from a 5.1 billion won loss to a profit. SKIET, the industry leader in battery separators that entered the stock market last May with a valuation of 7.5 trillion won, has maintained a market capitalization in the 8 trillion won range and shown a rising stock price trend after listing, which also contributes to the positive outlook.

Within the industry, the ongoing litigation issue between the Industrial Bank and the Ebest Association regarding the sale of WCP’s CB since last year is seen as a variable in the listing review. Last year, the Ebest Association signed a contract with law firm LKB & Partners and is engaged in a legal dispute with the Industrial Bank. The association claims that although a contract for the sale of WCP shares was signed, the Industrial Bank has not fulfilled it.

In July last year, the Ebest Association signed a WCP CB purchase contract worth 80 billion won with the Industrial Bank and deposited a contract payment of 6 billion won. However, the Industrial Bank requested contract termination two days before the transaction closing date, citing WCP’s exercise of a preemptive purchase right. The association filed a provisional injunction to prohibit the disposal of the CB against the Industrial Bank at the Seoul Central District Court, which was granted by the court.

However, before the injunction was granted, the Industrial Bank sold the CB it held to Kiwoom Capital, designated by WCP, making it difficult for the association to reclaim the CB. As a result, the association has filed a main lawsuit against the Industrial Bank. Since the CB has already been sold to a third party, the lawsuit is reportedly for damages due to the loss of opportunity to gain profits that the association would have obtained if it had held the CB.

Although the ownership of shares may not change depending on the lawsuit outcome, concerns have arisen that the litigation related to the major share transaction process could be a significant variable in the listing review. A Korea Exchange official said, "The stock exchange listing review fundamentally takes a conservative stance to minimize investor damage. If the lawsuit raises concerns about management stability, the review may be delayed, or it may require that the listing process proceed only after the litigation issue is resolved."

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