[CB Crisis]⑧ Selfie Global, Unstable Governance and Convertible Bond Volume Concerns

[Asia Economy Reporter Jang Hyowon] Another large volume of convertible bonds (CB) is expected to be released into the market from Selfie Global, which has recently shown instability due to forced sales of shares by the largest shareholder.

According to the Financial Supervisory Service's electronic disclosure on the 14th, on the 12th, Selfie Global's 10th series convertible bonds worth 2.4 billion KRW were converted. Accordingly, a total of 1.5 million new shares are scheduled to be newly listed on the 26th. This amount corresponds to 4.08% of the total issued shares.

The 10th series CB was issued in November 2019 with a scale of 8 billion KRW. The initial conversion price was 1,848 KRW, but due to a decline in stock price, the conversion price was adjusted downward to 1,600 KRW per share in February 2020. Since then, 5.6 billion KRW worth was converted by January last year, and the 2.4 billion KRW worth has been held by the company since April last year through exercising a call option.

Selfie Global sold the 2.4 billion KRW worth of 10th series CB it held again on the 12th. The sale amount was 2.79 billion KRW. It was resold with a 16.25% premium over the face value. The purchase price per share was about 1,860 KRW.

The corporations that purchased these CBs are Altan Korea and Solidus. Altan Korea is a corporation established with a capital of 700 million KRW, formerly named Altan Capital Korea. Altan Korea is currently involved in legal disputes, including filing a lawsuit related to the sale of management rights of ISE Commerce. Solidus is a corporation established in 2015 with a capital of 30 million KRW.

They can profit if Selfie Global's stock price does not fall below 1,860 KRW until the new shares from CB conversion are listed. As of the previous day, Selfie Global's stock price was 2,130 KRW. If it falls more than 13% by the 26th, it will enter a loss zone.

Selfie Global manufactures smart card products such as credit cards, check cards, and transportation cards, supplying them to financial institutions and card companies. As of the end of the first half of this year, it recorded separate sales of 19.3 billion KRW and operating profit of 2.9 billion KRW.

The largest shareholder of Selfie Global changed to Rocket International in September. Rocket International acquired 5,780,309 shares (15.72%) of Selfie Global from the previous largest shareholder, Oreum F&B, for 19.2 billion KRW.

Rocket International is a company engaged in cosmetics trading, recording sales of 3 billion KRW and net profit of 200 million KRW as of the end of last year. With total assets of 2.3 billion KRW and total liabilities of 1.9 billion KRW, it borrowed 12 billion KRW from KNJ Invest and one other person for the stock acquisition funds.

Eventually, forced sales occurred on the 19th of last month, leaving Rocket International with only 1.28 million shares, or 3.48%. Currently, Selfie Global is conducting a third-party allotment paid-in capital increase worth 6.4 billion KRW targeting Rocket International, and market attention is focused on whether the funds can be paid by the 28th.

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