On the 16th, L&F announced it would issue a non-name registered, coupon-style, unsecured public offering separated warrant bond (BW) worth 300 billion won.
A BW is a financial product that combines bonds and warrants (the right to acquire new shares at a specified price within a certain period). It has characteristics of both bonds and stocks.
Funds raised from this BW issuance are expected to be used for investments in a separate corporation for lithium iron phosphate (LFP) cathode materials and for operating the NCM (nickel, cobalt, manganese) cathode materials business.
An L&F official said, "This will play a key role in securing growth momentum through capital expansion and improving financial soundness, as well as expanding the product portfolio." The official also noted, "We plan to actively pursue financial structure improvements through stock price support activities even after the BW issuance."
A separated BW is structured so that the warrants and bonds can be traded independently. Investors can expect principal protection at maturity with an annual compound interest of 3% when holding only the bonds. Exercising the warrants allows for profit realization from future stock price increases.