[CB Crisis] Woori Technology Repays 5 Billion Won Following Put Option Demand

Improved Performance Due to Strong Nuclear Power Business
Stock Price Below Conversion Price... 1-Year-Old Issued CB Put Option Exercised
CB Balance 15 Billion Won, Conversion Right Exercise Possible Depending on Stock Price

[Asia Economy Reporter Hyungsoo Park] Woori Technology's cash holdings have decreased as early redemption requests for convertible bonds (CB) issued in the past continue. Although its performance is improving, led by the nuclear power plant business division, investors seem to be seeking to recover their investments because the conversion price is higher than the current stock price and the agreed interest rate is low.

According to the Financial Supervisory Service's electronic disclosure system on the 16th, Woori Technology repaid 5 billion KRW of the 12th series CB issued last November. CB investors exercised their early redemption rights (put options), and the company paid 5.1 billion KRW, including principal and approximately 100 million KRW in interest. The conversion price is 1,890 KRW, about 18% higher than the current stock price of 1,600 KRW.

One year ago, Woori Technology issued 10 billion KRW worth of CB to raise operating funds for its renewable energy business. ST International Corporation acquired the entire amount. The nominal interest rate and maturity interest rate are 1.0% and 3.0%, respectively. The terms include a condition allowing the conversion price to be lowered to 1,560 KRW if the stock price falls.

Woori Technology's stock price, which had maintained the 2,000 KRW level until the end of August, dropped to its lowest point of the year on the 13th of last month. This is interpreted as being influenced by increased market volatility due to inflation concerns and the overhang issue caused by CB conversion claims.

In the third quarter of this year, Woori Technology recorded consolidated sales of 14.8 billion KRW and operating profit of 2.4 billion KRW. Sales increased by 68%, and operating profit turned positive. Steady growth in spare parts supply and maintenance business in the nuclear power plant division drove the expansion. In 2008, Woori Technology succeeded in domestic production of the measurement and control system, one of the three core technologies of nuclear power plants. Since the beginning of this year, the company has expanded its business area from existing equipment supply to nuclear power plant maintenance, generating new sales. In August, it began routine maintenance of the control and measurement equipment (MMIS) for Shin Hanul Unit 1.

A Woori Technology official explained, "We will supply core Korean-type nuclear power plant equipment both domestically and for export," adding, "The growth of the business division will accelerate."

Due to the characteristics of the nuclear power plant business division, Woori Technology expects strong performance in the fourth quarter as well. The government launched the '2050 Carbon Neutral Green Growth Committee' and decided to resume construction of Shin Hanul Units 3 and 4. With the extension of operation periods for 10 aging nuclear power plants and other government policies to revitalize nuclear power, performance improvement is expected to continue.

Woori Technology's current assets on a consolidated basis increased from 61.9 billion KRW at the end of last year to 74.7 billion KRW at the end of the third quarter this year. Although cash and cash equivalents decreased from 27.9 billion KRW to 12.3 billion KRW, accounts receivable and other current receivables increased from 4.7 billion KRW to 12.6 billion KRW. Other current financial assets also rose from 11.3 billion KRW to 23.4 billion KRW.

Excluding the recently repaid 5 billion KRW, 15 billion KRW worth of CB remains outstanding. Depending on future stock price conditions, investors may choose to convert or request redemption.

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