1. What is Hyundaibio’s CB Issuance?
Hyundaibio has decided to issue 15 billion won worth of convertible bonds (CBs) through a private placement. The conversion price is set at 5,804 won, with a maturity interest rate of 4%. The funds raised will be used for operating capital.
2. Why Issue Convertible Bonds?
Hyundaibio has recently focused on improving its financial structure through rights offerings and debt repayment. This CB issuance is interpreted as a strategy to secure additional operating funds to strengthen R&D investment, including new drug development, and further solidify financial stability.
3. How Will This Impact the Stock Price?
Positive Impacts
- • Increased R&D Investment: Expected acceleration of new drug development.
- • Improved Financial Structure: Securing long-term stability.
- • Enhanced Investor Confidence: Participation of savings banks.
Negative Impacts
- • Potential Stock Dilution: Upon conversion of CBs to shares.
- • Conversion Price Adjustment Risk: In case of stock price decline.
- • Potential Cash Outflow: Repayment burden at maturity.
4. What Should Investors Do?
Investors should carefully consider the following:
- • Progress of key drug pipelines.
- • Potential for conversion price adjustments.
- • Changes in financial soundness.
- • Company transparency and related issues.
The CB issuance is a complex event that needs to be analyzed from both short-term and long-term perspectives. Prudent investment decisions are essential.