[Funding] CS Bearing Raises Capital Through Rights Offering for Expansion Investment

[Asia Economy Reporter Hyungsoo Park] Amid optimistic forecasts for the renewable energy industry, CS Bearing is raising funds for expansion through a rights offering.

According to the Financial Supervisory Service's electronic disclosure system on the 9th, CS Bearing will issue 0.41 new shares per existing share to raise 50.8 billion KRW. The planned issue price for the new shares is 12,950 KRW.

The raised funds will be used for facility investment in the Vietnam subsidiary, repayment of borrowings, and raw material purchases.

Since April last year, CS Bearing has been expanding onshore facilities and establishing offshore facilities. It is developing 12MW-class offshore wind blade bearings for its major client GE. It is also negotiating with Siemens Gamesa and Vestas to develop large-scale offshore wind bearings of 10MW or more, following the global trend. Discussions with new clients and for onshore 3~6MW-class bearings are also underway, making it necessary to establish a mass production system.

Among the raised funds, 20 billion KRW will be used to respond to early redemption requests for convertible bonds (CB) and bonds with warrants (BW). In 2020, CS Bearing issued CB and BW each worth 10 billion KRW. The conversion and exercise prices are both 28,464 KRW. Since the current stock price is above 18,000 KRW, early redemption requests are expected.

The remaining funds will be used as operating capital to prepare for increased production capacity due to the expansion of onshore wind facilities and additional offshore wind facilities at the Vietnam subsidiary.

CS Wind, the largest shareholder, will participate 100% in the allocated shares through cash on hand and borrowings. Since the current stock price is higher than the planned issue price, the likelihood of forfeited shares is low. Demand for renewable energy is expected to increase in Europe as it seeks to reduce dependence on crude oil following Russia's invasion of Ukraine. CS Bearing's stock price has risen more than 40% in the past month. If forfeited shares occur after the public offering, the underwriter will subscribe to them.

As of the first quarter, total borrowings amount to 63.675 billion KRW, with a borrowing dependency ratio of 47.6%. The consolidated debt ratio slightly increased from 144.0% at the end of last year to 152.3% at the end of the first quarter.

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