[Funding] Hanchang, Will the Tangled Thread Untangle with Q1 Performance Improvement?②

Resolution of BW Issuance Board Meeting on October 25 Last Year
Procurement Schedule Delayed Due to Request for Amendment Report Submission
Q1 Sales and Operating Profit Surge Year-on-Year

[Asia Economy Reporter Hyungsoo Park] HanChang, which submitted a securities registration statement on March 25, has been asked once again by the Financial Supervisory Service (FSS) to submit a corrected registration statement. While the plan to raise a large amount of funds by publicly issuing bonds with warrants (BW) continues to be delayed, sales and profits in the first quarter of this year have increased significantly.

According to the FSS electronic disclosure system on the 11th, HanChang held a board meeting on October 25 last year and resolved the agenda to issue BW, but it has not been able to raise funds for six months.

The original plan was to complete the fundraising by the end of November last year, but the subscription date has been postponed due to the supervisory authority's request for correction of the securities registration statement and schedule changes.

According to the supervisory authority's request for submission of a corrected registration statement, it must be submitted within three months. If not submitted, the securities registration statement is deemed withdrawn under the Capital Markets Act. HanChang has not submitted the corrected registration statement even after about a month since receiving the request on the 5th of last month.

The supervisory authority requests submission of a corrected registration statement if the securities registration statement does not meet the proper format or if important matters in the content of the securities registration statement are unclear, which could cause significant misunderstanding to investors.

HanChang recorded sales of 22.8 billion KRW and operating profit of 4 billion KRW in the first quarter. These figures increased by 208.4% and 396.5%, respectively, compared to the same period last year. Although the improved performance is expected to have a positive impact on fundraising, it is difficult to make a judgment before submitting the corrected registration statement.

HanChang plans to use the funds raised through BW issuance as operating capital for new business promotion and to repay borrowings of its affiliate, HanYeon Development.

Since March last year, HanChang started a steel distribution business and allocated 3 billion KRW of the public funds to purchase raw materials related to the steel distribution business. It supplies steel raw materials such as domestic rebar, imported rebar, H-beams, other shaped steel, and steel plates to AronBest, Seowon Industry, and Daebo Industry. The steel distribution business generates monthly sales of over 1 billion KRW. The rebar distribution sales in the first quarter reached 4 billion KRW.

As a new business, HanChang is promoting a live commerce (D2C) business. It will use 5 billion KRW to purchase products to be sold on the D2C platform. HanChang is the domestic exclusive distributor of "Mono B," a premium athleisure yoga wear brand from California, USA. The business operates by purchasing products from the brand company and distributing them domestically. There are plans to expand the brands handled.

HanChang will invest 5.7 billion KRW to build a waste synthetic resin processing plant in Jindo-gun. It plans to establish a pyrolysis oil plant demonstration facility with a daily processing capacity of 8 tons in Jindo-gun, Jeollanam-do, and promote the pyrolysis oil industry through this.

Funds will be disbursed to HanYeon Development in the form of loans to enable repayment of 10.4 billion KRW and 2.3 billion KRW borrowed from the Credit Cooperative and Korea Investment Savings Bank, respectively. HanYeon Development has more liabilities than assets and held a board meeting at the end of last year to sell part of its shares in JiyuOn.

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