Sangji Construction, a KOSDAQ-listed company, announced on the 8th that the number of shares subscribed for the paid-in capital increase through public offering was totaled at 212,700 shares. The subscription rate was only 5.65%, reflecting poor performance.
The failure to attract interest is interpreted as a concern that Sangji Construction's stock price, which rose significantly after being linked to Lee Jae-myung of the Democratic Party of Korea as a political theme stock, could sharply decline to its original level after the early presidential election on June 3.
The number of shares subscribed by existing shareholders between the 28th and 29th of last month was only 234,198. Ultimately, Sangji Construction, which originally planned to raise 4 million shares, ended up increasing only 446,898 shares, which is about 11% of the total. This amounts to approximately 10.2 billion won. The remaining unsubscribed shares will not be issued.
Although the largest shareholder kept the promise to subscribe to all allocated shares, the proportion of these shares was less than 4%. Refunds and payment for the subscribed shares related to this capital increase will be processed until the 12th. New shares are expected to be listed on the 22nd of this month.
When Sangji Construction set out to pursue this capital increase in February of this year, the initial offering price was 5,000 won, but the stock price surged around April, causing the final offering price to skyrocket to 22,850 won, more than quadrupling. The total issuance scale also surged from the existing 20 billion won to 91.4 billion won.
The rise in stock price was significantly influenced by the fact that former Sangji Construction outside director Lim Moo-young was known to have participated in Lee Jae-myung's campaign during the 2022 presidential election, categorizing the stock as an 'Lee Jae-myung theme stock.' Sangji Construction recorded consecutive upper limit prices for six trading days from the 2nd to the 9th of last month and closed on the upper limit price for two days in a row, pushing the stock price above 40,000 won. Compared to 3,400 won at the end of March, the stock price skyrocketed by 1,203% in about a month.
Sangji Construction plans to use the funds secured this time to repay 8 billion won in borrowing funds to Kai Room D&D and use the remainder for operating capital for its headquarters and construction sites.
Meanwhile, SK Securities, the underwriter for the capital increase, is only responsible for the brokerage work and will receive a fee of 150 million won.