1. Heungkuk F&B’s ₩10B CB Issuance: What Happened?

On July 29, 2025, Heungkuk F&B announced the private placement of ₩10 billion in convertible bonds (CBs). The conversion price is set at ₩1,898, with both coupon and maturity rates at 0.0%. The conversion period runs from August 6, 2026, to July 6, 2030. This represents approximately 11.6% of the company’s market capitalization.

2. Why the CB Issuance?: Funding Liquor Business Expansion and Financial Stability

Heungkuk F&B plans to invest the proceeds from the CB issuance in its liquor business expansion. As the company prepares for its full-scale entry into the liquor market in 2025, it requires funds for production facility expansion, marketing reinforcement, and other initiatives. The issuance also aims to improve the negative operating cash flow reported in the first quarter and strengthen the company’s financial stability.

3. The Impact of the CB Issuance: Opportunities and Risks

  • Positive Impact: Securing growth momentum and improving financial structure through investment in the liquor business.
  • Negative Impact: Potential stock dilution upon CB conversion and increased pressure to meet investor expectations.

External factors such as raw material prices, exchange rates, interest rates, and the possibility of an economic downturn could also impact Heungkuk F&B’s business.

4. Investor Action Plan: Thorough Analysis and Prudent Approach Required

Investors considering Heungkuk F&B should carefully analyze the following:
1. Growth potential and competitiveness of the liquor business
2. Dilution effects of CB conversion
3. Ability to respond to changes in the external environment

Heungkuk F&B’s stock price is expected to be significantly influenced by the success of its liquor business, changes in the external environment, and the company’s risk management capabilities. Therefore, thorough analysis and a cautious approach are necessary before making investment decisions.