[After CB Issuance] NSN Sells CB at Discount Before Receiving Investment from GW Biotech

[Asia Economy Reporter Jang Hyowon] It has been revealed that NSN, a KOSDAQ-listed company, sold its own convertible bonds (CB) at a price lower than the expected valuation. Coincidentally, immediately after selling the CB, an issue regarding the transfer of NSN's management rights arose, causing NSN's stock price to surge, and the value of the CB is estimated to have increased further.

Capture of NSN homepage.

According to the Financial Supervisory Service's electronic disclosure on the 25th, NSN recently announced that it would sell its own CBs worth 7.13387 billion KRW to an entity called 'Squire No.1 Association' for about 7.2 billion KRW. This price includes a 1% premium over the total face value of the CBs.

Specifically, these include NSN's 17th series CB worth 1.12387 billion KRW, 21st series CB worth 4.01 billion KRW, 22nd series CB worth 1 billion KRW, and 23rd series CB worth 1 billion KRW. Although the issuance dates of these CBs differ, NSN purchased most of them at their original issuance prices starting from July last year.

The valuation of these CBs is estimated to be significantly higher than the sale price. The conversion prices of these CBs are mostly lower than the closing price as of the 23rd. The conversion price of the 17th series CB is 1,558 KRW, the 21st and 22nd series CBs are 1,010 KRW, and the 23rd series CB is 1,036 KRW.

Due to the continuous decline in NSN's stock price, the conversion prices of the CBs have dropped to the refixing (conversion price adjustment) limit. The conversion prices of the 21st and 22nd series CBs can still decrease further. This means that even if the stock price falls, CB investors have some leeway.

As of the 23rd, NSN's closing price was 1,475 KRW. Excluding the 17th series CB, whose conversion price is higher than the closing price, the closing price is 46% higher than the conversion prices of the 21st and 22nd series CBs and 42% higher than that of the 23rd series CB.

Specifically, the 5.01 billion KRW worth of 21st and 22nd series CBs can be converted into approximately 4,960,396 shares based on the conversion price of 1,010 KRW. Excluding stock dilution and simply calculating at the closing price on the 23rd, the valuation is about 7.3 billion KRW. These CBs are currently in a state where immediate conversion to stock can be requested.

The 1 billion KRW worth of 23rd series CB can also be converted into 965,251 shares based on the conversion price of 1,036 KRW. As of the 23rd, the estimated valuation is about 1.4 billion KRW. The 17th series CB has a maturity guaranteed yield of 3% and will mature on April 5th. Holding it for just over a month can yield a higher return than the 1% premium NSN received.

After NSN announced that it sold the CBs it held to 'Squire No.1 Association' at a low price, coincidentally, a listed company called 'GW Vitec' announced that it would invest 12.1 billion KRW in the largest shareholder 'JK Partners No.1 Investment Association' to participate in NSN's management.

NSN had called for a paid-in capital increase worth 15 billion KRW targeting its largest shareholder last July but had delayed payment for about six months. With the expectation that NSN's capital increase would be completed through GW Vitec's investment, NSN's stock price showed strength again on the 24th, the following day.

Meanwhile, the identity of 'Squire No.1 Association,' which gained valuation gains by purchasing NSN's CBs, remains unknown. Attempts to contact NSN for inquiries were unsuccessful.

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