Taekwang Industrial decided to issue exchangeable bonds (EB) based on its treasury shares. Some investors who had expected a buyback sold their shares.
Taekwang Industrial announced on the 27th that it would issue an EB using 271,769 of its treasury shares to raise approximately 318.6 billion won. The size of Taekwang Industrial's treasury shares accounts for 24.41% of the number of issued shares. The nominal interest rate and maturity interest rate of the EB are both 0%.
Taekwang Industrial plans to use the funds raised from the EB issuance for new business investments, including 200 billion won this year and about 120 billion won in 2026.
Taekwang Industrial also convened an extraordinary shareholders' meeting on the 31st. This is to add business objectives to the company’s articles of incorporation for business diversification and entry into new ventures. The plans include investments in ▲ real estate development ▲ development and operation of accommodation facilities such as hotels and resorts ▲ overseas construction projects ▲ investments in real estate investment trusts (REITs) and project financing investment companies (PFV) ▲ trading and brokerage of blockchain-based assets ▲ manufacturing and trading of cosmetics ▲ and renewable energy projects.
After Taekwang Industrial's announcement, the stock price turned downward in the aftermarket. At Nextrade, Taekwang Industrial's shares traded at 1,056,000 won at 5:35 p.m. that day, which is a decline of 4.3% (47,000 won) from the regular trading closing price of 1,103,000 won. Investors appear to have decided to sell after being disappointed that Taekwang Industrial chose to issue EB instead of buying back shares.
Taekwang Industrial is a representative stock with a high proportion of treasury shares and a low price-to-book ratio (PBR). With expectations that the new government will accelerate the buyback and increase the PBR, Taekwang Industrial's stock price has risen sharply.
Taekwang Industrial's stock price increase rate has reached 80% compared to its low in April. It has returned to the 'blue chip' status (over 1 million won per share) this month, the first time in three years since June 2022.