LigaChem Biosciences revised the terms of its 500 billion won fundraising deal on the 16th, lowering the conversion price from 149,300 won to 121,400 won per share. The adjustment resulted from a stock price decline, increasing the number of convertible preferred shares (CPS) that may be issued by approximately 23 percent. The company stated it issued the corrected disclosure after third-party financial investors were confirmed.
LigaChem Biosciences Lowers CPS Conversion Price to 121,400 Won
LigaChem Biosciences announced on the 16th through a corrected major disclosure report that the issuance price and conversion price for the 330 billion won third-party allocation capital increase of CPS changed from 149,300 won per share to 121,400 won per share. The number of CPS issued increased from 2.21 million shares to 2.72 million shares. The ratio of shares to be issued upon conversion to total shares changed from 5.97 percent to 6.84 percent.
The reference stock price for calculating the CPS issuance price decreased from 144,309 won to 110,839 won. The premium rate on the reference stock price changed from 3.46 percent to 9.44 percent. The company recalculated the weighted arithmetic average stock prices for the past one month, one week, and most recent day using the previous day (the 15th) as the base date. The conversion price was set at 121,400 won following rounding up to the nearest trading unit, applying the higher of the arithmetic average of 121,376.54 won and the most recent day's weighted arithmetic average of 110,838.70 won.
The minimum adjustment price for CPS also decreased from 119,500 won to 97,200 won. Profit distribution terms were corrected. Previously listed as "not applicable," the revised terms specify that CPS receives preferential dividends at an annual rate of 0 percent but receives dividends at the same rate as common stock. Profit dividends apply cumulatively and participatively, with unpaid amounts accumulated and paid preferentially in the next fiscal year's dividend, and participating together during common stock dividends.
Convertible Bond Terms Adjusted with Lower Conversion Price
The terms for issuing 170 billion won in convertible bonds (CB) were also corrected. The CB conversion price decreased from 149,300 won per share to 121,400 won per share. The number of convertible shares increased from 1.14 million shares to 1.40 million shares. The ratio of shares to be issued upon conversion to total shares changed from 3.08 percent to 3.64 percent. Based on outstanding bond-related securities, the ratio to total issued shares was listed as 3.78 percent.
The minimum adjustment price for CB also decreased from 119,500 won to 97,200 won. The bond type was corrected from a typographical error. It changed from "registered unsecured private placement convertible bonds" to "bearer non-interest unsecured private placement convertible bonds." Both the coupon rate and maturity interest rate are 0 percent, with a maturity date of July 24, 2036. The conversion request period runs from July 24, 2028 to June 23, 2036.
With this correction, if both CB and CPS convert to common stock, the number of shares that can be issued increased from 3.35 million shares to 4.12 million shares. This represents approximately 11.12 percent of the 37.02 million existing common shares.
Third-Party Financial Investors Confirmed for 500 Billion Won Deal
The list of third-party financial investors was confirmed. Previously listed only as Korea Development Bank, largest shareholder PAN ORION Corp. Limited, and third-party financial investors, the corrected disclosure includes NH Daily Biohealth Private Investment Limited Partnership, KB NH Corporate Financial Stability Private Investment Limited Partnership, Industrial Bank of Korea, Hana Securities, Hana Beyond Finance Fund, Hana-KN Regional Innovation Investment Association, Woori Investment & Securities, IBK Capital, IMM Startup Venture Fund No. 2, Atinum Growth Investment Association 2023, KB Digital Platform Fund, KB Secondary Plus Fund No. 3, Envestor 2022 High-Five Innovation Growth Fund, and Meritz Securities.
The investment amount by investor is 250 billion won total from Korea Development Bank (85 billion won in CB and 165 billion won in CPS), 125 billion won total from Pan Orion (42.5 billion won in CB and 82.5 billion won in CPS). The remaining 125 billion won is divided among the confirmed third-party financial investors. The payment date is the 24th, and the scheduled delivery date for new CPS shares is the 14th of next month.
LigaChem Biosciences Allocates Funds to Drug Development
The purpose of using the raised funds remains the same as before. The company plans to use all 170 billion won in CB and approximately 330 billion won in CPS for research and development costs for new drugs including antibody-drug conjugates (ADC) and immuno-oncology drugs, as well as operating funds. The planned annual usage amounts for CB are 30 billion won in 2026, 60 billion won in 2027, and 80 billion won after 2028. For CPS, the amounts are 60 billion won in 2026, 120 billion won in 2027, and 150 billion won after 2028.
FAQ
Why did LigaChem Biosciences lower the conversion price from 149,300 won to 121,400 won?
The conversion price decreased due to a stock price decline. The company recalculated the weighted arithmetic average stock prices using the 15th as the base date, applying the higher of the arithmetic average and the most recent day's weighted arithmetic average, resulting in a conversion price of 121,400 won after rounding up to the nearest trading unit.
How many shares can be issued if both convertible bonds and convertible preferred shares convert to common stock?
With the corrected terms, if both CB and CPS convert to common stock, the number of shares that can be issued is 4.12 million shares, representing approximately 11.12 percent of the 37.02 million existing common shares issued by LigaChem Biosciences.
