[Featured Stock] Ecopro BM Rises Early on Expectations from Paid and Free Capital Increase

[Asia Economy Reporter Lee Seon-ae] EcoPro BM, a secondary battery cathode material company, is showing an upward trend in the early trading session following its decision on a 500 billion KRW paid-in capital increase and a 3-for-1 bonus issue.

On the 7th, the stock price started at 443,700 KRW and rose to 450,200 KRW in the early session, showing an upward trend. As of 9:30 AM, the increase has stabilized, and it is currently trading at 426,200 KRW, up 0.57%. It also maintains its position as the number one in KOSDAQ market capitalization, which it secured the previous day.

This suggests that the market is expressing more expectation than concern regarding EcoPro BM's decision on the paid-in and bonus capital increases.

EcoPro BM announced yesterday a paid-in capital increase worth 500 billion KRW and a bonus issue allocating 3 new shares per 1 existing share. The company decided on a paid-in capital increase through a rights offering followed by a general public offering for unsubscribed shares to raise 30 billion KRW for debt repayment and 470 billion KRW for acquiring securities of other companies. The number of new shares to be issued is 1,611,344 shares. The issue price per new share is 310,300 KRW. Subscription will be conducted targeting the employee stock ownership association and existing shareholders, with a general public subscription for unsubscribed shares scheduled for June 21-22. The new shares are expected to be listed on July 7.

Additionally, EcoPro BM also decided on a bonus issue allocating 3 new shares per 1 existing share. The number of new shares to be issued is 73,351,008 shares. The record date for the bonus issue is June 28, and the new shares are expected to be listed on July 15.

Jung Jae-heon, a researcher at DB Financial Investment, stated, "The funds raised through the paid-in capital increase will be invested in EcoPro Global, which is the first step for overseas expansion." He added, "Under EcoPro Global, EcoPro Europe and EcoPro America will be established, and joint ventures (JVs) with partner companies will be formed to build overseas production sites in Europe and North America." He further explained, "This is the first decision to actively expand overseas production capacity by 320,000 tons, which is about 59% of the 550,000-ton production capacity guidance for 26E, and it holds significance beyond simple fundraising." He evaluated, "Since the overseas expansion plan that the market had been anticipating has materialized, it will have a positive impact on the stock price." However, he added, "Changes to the target stock price reflecting dilution from the paid-in and bonus issues will be made after the issue price of the new shares is finalized."

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