The largest shareholder of ISU PETASYS, who drew criticism after announcing a plan for a large-scale capital increase of 550 billion won after market close, recently took out a stock collateral loan. Analysts suggest that the largest shareholder is preparing ''ammunition'' to participate in the capital increase. After financial authorities placed a brake on the company's capital increase plan, this represents another follow-up measure after the scale of the capital increase was nearly halved to surpass the regulatory hurdle.
According to the electronic disclosure system on the 20th, the largest shareholder of ISU PETASYS, ''ISU,'' received a loan of 41.3 billion won from Hana Bank on the 11th. Of the 41.3 billion won, 32.6 billion won has already been used. The annual interest rate is 5.30%, and the collateral is 1,372,340 shares of ISU PETASYS.
This loan is the largest currently obtained by ISU by putting up ISU PETASYS shares as collateral. In April last year, ISU obtained a limit of 18 billion won from Shinhan Bank, and in May of the same year, borrowed 10 billion won from Daegu Bank. The collateral for these loans is also shares of ISU PETASYS.
With the loans received until this month, about one-third of the ISU PETASYS shares held by ISU (equity ratio of 21.19%) is tied up as collateral. This represents 6.28% (3,972,340 shares) of the total issued shares with voting rights. The annual interest that ISU must pay on the loans from the three banks is about 3 billion won.
As ISU bears the bank interest of tens of millions of won while taking out loans, some interpret this as a strategy to participate in the capital increase. Given the backlash from shareholders during the capital increase process, it is suggested that this is a measure to quell the discontent.
In November of last year, ISU PETASYS announced a 550 billion won capital increase, stating it would acquire carbon nanotube (CNT) manufacturer JEIO and invest in facilities. In response, shareholders expressed concern over what kind of synergy could be achieved between ISU PETASYS, which manufactures semiconductor substrates, and JEIO.
The Financial Supervisory Service (FSS) also ordered ISU PETASYS to rectify the securities registration statement related to the capital increase, and ISU PETASYS withdrew its acquisition plan for JEIO. The ongoing capital increase pertains only to 250 billion won for facility funds. In this process, the securities registration statement has been amended five times, and as of now, three months after the initial announcement, it has yet to pass the FSS review.
If the FSS does not request corrections to ISU PETASYS's securities registration for the capital increase, the company will solicit subscriptions from existing shareholders. If any shares are not subscribed, a public offering for general investors will be conducted on April 14-15. The scheduled issue price is 24,600 won, which is 40% lower than the closing price of 41,100 won on that day. The final issuing price will be determined later by averaging the weighted arithmetic mean share price for one month and one week and applying a certain discount rate.
However, ISU's financial capacity is limited. As of the end of 2023, ISU's cash and cash-equivalent assets amount to only 17.6 billion won. Even when combined with assets that can be liquidated within a year, such as accounts receivable, the total is 52.3 billion won. This reinforces the analysis that the stock collateral loan raised by the major shareholder is aimed at participating in the capital increase.
Meanwhile, the FSS hinted at the possibility of strengthening reviews of capital increases this year. It led to the cancellation of the capital increase for Korea Zinc (worth 2.5 trillion won), which is embroiled in a conflict over management rights with private equity firm MBK Partners, and Kumyang's capital increase (450 billion won) to repay facility funds and debt, indicating a more meticulous review process.
Lee Book-hyun, head of the Financial Supervisory Service, commented at a press briefing on the ''2025 work plan'' on the 10th regarding the review standards for securities registration, stating, ''I don't think it's right to place excessive burdens on corporations, but at the very least, adequate information necessary for the decision-making of shareholders or stakeholders must be included.''