UNICHEM’s ₩6.1 Billion Convertible Bond Issuance: What Happened?
On September 8, 2025, UNICHEM announced its decision to issue ₩6.1 billion in convertible bonds. The conversion price is set at ₩1,656, with a 0% coupon rate and a 3.0% maturity rate. Conversion will be available starting September 16, 2026. The funds raised will be used to invest in and operate UNICHEM’s burgeoning K-content business.
Why Issue Convertible Bonds? – Expanding into the Content Market
Facing slowing growth in its traditional leather business, UNICHEM is actively investing in the entertainment and content industry to secure new growth engines. With the goal of producing two dramas in 2026, this CB issuance will provide essential funding for content creation, talent acquisition, and other related expenses.
How Will This Impact UNICHEM’s Stock Price?
- Positive Aspects: Increased growth potential through investment in the content market. Reduced interest expenses due to the low coupon rate.
- Potential Risks: Current stock price is below the conversion price, making immediate conversion unlikely. Uncertainty surrounding the success of the content business. Potential for future stock dilution (though the amount is relatively small compared to the current market capitalization).
Key Considerations for Investors – Essential Checkpoints
- Monitor Content Business Performance: Closely track drama production progress and market reception.
- Manage Stock Volatility: Be prepared for potential stock price fluctuations due to conversion possibilities and market conditions.
- Foreign Exchange Risk: Consider the potential impact of foreign exchange fluctuations on raw material imports and content exports.