The stock price of Solux, a lighting company struggling to merge with Aribio due to five correction requests from the Financial Supervisory Service, has plunged for three consecutive trading days. Solux's shares fell to the price limit for two trading days, influenced by the margin trading of some of the shares owned by Jeong Jae-jun, the chief executive of Aribio, the largest shareholder.
As of 10:33 a.m. on the 18th, Solux's shares are trading at 3,115 won, down 7.29% (245 won). The trading volume was 36 million shares, and the trading value exceeded 100.8 billion won. Previously, Solux's shares fell to the price limit for two consecutive trading days from the 14th to the 17th. This was influenced by news that some of the shares owned by Jeong Jae-jun, the largest shareholder of Solux, were sold off.
According to the Financial Supervisory Service's electronic disclosure system, 4.32% of the shares previously held by CEO Jeong were sold on the market. On the 13th, 70,000 shares were sold, and 989,772 shares were sold on the 14th. Jeong's ownership dropped from 34.3% to 29.98%. It is likely that Jeong's equity decreased further as of the 18th. This is because the margin trading volume was not fully resolved during the lower limit price on the 14th and 17th. Only on the morning of the 18th, with the remaining volume being sold, the margin trading issue seems to have been resolved for now. After the market closed on the 17th, the Korea Exchange announced that Solux's stock price volatility over three days was minus (-) 52.34%, with the maximum account involvement rate at 25.92% and the involvement rate of 10 accounts reaching 78.48%. The margin trading volume pertaining to Jeong came from Korea Investment & Securities, and it is estimated that a total of 6 million shares were sold.
The reason for the margin trading of some equity of the largest shareholder is due to CEO Jeong's loan agreement, where he provided 6 million shares of Solux as collateral and borrowed 20 billion won from Coprism Partners. After the loan agreement ended without repayment of the loan, the collateral rights were executed on the shares of Solux provided as collateral.
Solux responded to the Korea Exchange's request for a disclosure related to 'significant market fluctuations' on the 17th. In this disclosure, it explained that 'the largest shareholder's loan agreement secured by the company's shares ended on the 8th, but as debt repayment has not occurred, the creditor is executing collateral rights.'
It continued, saying, 'Depending on whether there is a new loan agreement secured by shares and the quantity of the shares provided as collateral, a disclosure regarding the execution of a loan agreement involving the change of the largest shareholder may occur.' It added, 'If the debt is repaid, a disclosure may not occur. There are no details that have been concretely confirmed or identified yet.'
Meanwhile, Solux, which is promoting a merger with Aribio, listed on its disclosure the actions it intends to take within the next month, including ▲ the decision to issue convertible bonds ▲ investment in other corporations of more than 10% of its equity (including the acquisition of securities-related bonds) ▲ signing a loan agreement involving the change of the largest shareholder ▲ resolution to convene a shareholders' meeting.
Among these, the decision to issue convertible bonds and the investment in other corporations of more than 10% of its equity are related to the merger with Aribio. According to the disclosure, Solux is considering investments including the acquisition of securities-related bonds from Aribio, but it explained that if the issuance of convertible bonds is not realized, the investment in other corporations may not proceed. In the case of investment in other corporations, it could be used as a strategy for gradual acquisition of management rights and then merging or as an alternative strategy for indirect mergers.
Previously, Solux attempted to merge with Aribio, a company developing dementia treatment drugs, but faced rejection as it received five requests from the FSS to amend its securities registration statement related to the merger. Solux is creating controversy about a reverse listing in the process of incorporating Aribio as an affiliated company. (Related article☞FSS requests amendments five times... The challenging 'de facto reverse listing' challenge of a dementia drug developer)