Solus Advanced Materials Secures 240.8 Billion KRW Investment Capital Through Successful Rights Offering

by Park Sunmi

Published 11 May.2022 13:57(KST)

Securing 240.8 Billion Won Investment Funds

Photo of the factory site in Quebec, Canada. Provided by Solus Advanced Materials.

[Asia Economy Reporter Park Sun-mi] Solus Advanced Materials has successfully secured 240.8 billion KRW in investment funds as its rights offering subscription rate exceeded 100%.

Solus Advanced Materials announced on the 11th that the rights offering subscription rates for existing shareholders conducted on the 9th and 10th were ▲common stock 102.32%, ▲1st preferred stock 111.45%, and ▲2nd preferred stock 109.21%, respectively.

The number of shares planned to be issued were ▲4,521,437 common shares, ▲1,088,819 1st preferred shares, and ▲243,300 2nd preferred shares. The number of shares oversubscribed were ▲251,687 common shares, ▲160,651 1st preferred shares, and ▲43,088 fewer 2nd preferred shares, respectively.

The allocation ratio for oversubscription was ▲58.36% for common stock, ▲22.39% for 1st preferred stock, and ▲48.00% for 2nd preferred stock. Subscribers who participated in the oversubscription will be allocated shares calculated by multiplying the number of oversubscribed shares by the oversubscription allocation ratio, with any fraction less than one share truncated.

Since there are no forfeited shares, a general public offering subscription will not be conducted. The new shares are scheduled to be listed on the 30th of this month.

The successful completion of Solus Advanced Materials’ rights offering is analyzed to be influenced by the growth potential of its battery copper foil business. Recent consecutive supply contract announcements with global companies have raised growth expectations for the battery copper foil business, contributing to active participation from shareholders.

The pricing of the new shares, suitable for maximizing existing shareholder value, also played a role. The new share issue prices are ▲49,400 KRW for common stock, ▲12,700 KRW for 1st preferred stock, and ▲14,850 KRW for 2nd preferred stock, which are 30%, 17%, and 18% lower than the previous closing prices, respectively.

Solus Advanced Materials plans to use the funds raised through the rights offering to establish a 17,000-ton mass production system in the second half of 2024 at its Quebec plant in Canada. Kwak Geun-man, CFO of Solus Advanced Materials, stated, “The success of this rights offering subscription is a meaningful achievement amid uncertain domestic and international financial environments. Having secured the funding base for the Quebec plant scheduled to begin construction in July this year, we will accelerate our lead in the North American battery copper foil market following Europe.”