‘Live Ammunition Loaded’ Polaris Sewon, Existing Shareholders' Subscription Begins... Will Undervalued Appeal Emerge?

Major Shareholder Polaris Office Seeks Over 120% Subscription to Boost Rights Offering Success

[Asia Economy Reporter Jang Hyowon] Polaris Seawon, a specialized company in automotive air conditioning system components, saw its largest shareholder Polaris Office take the lead to ensure the success of its rights offering. This move is seen as an expression of confidence in Polaris Seawon’s future growth potential and corporate value appreciation.

On the 12th, Polaris Office announced that it would participate in Polaris Seawon’s rights offering at the maximum subscription limit of 120%. This is to strengthen its control as the largest shareholder while promoting the success of the subscription. The acquisition amount is approximately 1.5 billion KRW, and the post-offering shareholding ratio will be 8.48%.

Polaris Seawon is currently conducting a general public offering of unsubscribed shares following a rights offering worth a total of 15.75 billion KRW.

Subscription for existing shareholders will take place over two days, from the 13th to the 14th, with a new share allocation ratio of 0.2986701978 shares per existing share. Existing shareholders can oversubscribe up to 120% of their subscription rights certificates. After payment on the 21st, the new shares will be listed on August 3rd.

The issue price is 1,575 KRW, which is about 27% cheaper compared to Polaris Seawon’s current stock price level in the 2,000 KRW range. Maintaining a stock price higher than the issue price appears to have increased the investment attractiveness.

The funds raised from the capital increase will be used for 6.75 billion KRW in operating funds and 9 billion KRW for acquiring securities of other companies. The purpose is to quickly respond to order volumes through raw material purchases and facility investments, and to strengthen control over the subsidiary Polaris Uno. Polaris Seawon has decided to acquire the third tranche of convertible bonds (CB) of Polaris Uno.

A Polaris Office official stated, “As this rights offering is conducted to secure funds for the fundamental growth of Polaris Seawon, we actively participated as the largest shareholder to fulfill responsible management,” adding, “We are reviewing various shareholder-friendly policies that can enhance shareholder value beyond oversubscription.”

Polaris Seawon supplies automotive air conditioning parts such as header condensers and evaporators to customers including Hyundai Kia Motors, GM (General Motors), Ford, Tesla, Rivian, and Lucid Motors. It is known to supply parts for Hyundai’s first sedan-type pure electric vehicle ‘Ioniq 6’, GM and Ford’s first electric pickup trucks ‘Hummer EV’ and ‘F-150 Lightning’.

With the expansion of electric vehicle investments by global automakers, orders for eco-friendly vehicle parts continue to increase. As of the first half of this year, Polaris Seawon’s order backlog for eco-friendly vehicles accounts for about 20% of the total, approximately 102 billion KRW.

In particular, Hyundai Motor Group, a major automaker, has announced plans to invest 63 trillion KRW domestically by 2025 in electric vehicles, research and development, and new businesses. It also plans to establish its first dedicated electric vehicle factories in Georgia, USA, and domestically to expand electric vehicle production bases both at home and abroad.

A Polaris Seawon official said, “The funds raised through the capital increase will be used to expand the air conditioning parts business centered on electric vehicles,” and added, “The increase in Polaris Uno’s shares aims to further strengthen synergy among group companies through stabilizing the overall governance structure of the Polaris Group.”

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