Hyungji Global shares surge as Lee Jae-myung's acquittal boosts capital plans

Hyungji Global has also engaged in a rights offering and free share issuance following Hyungji Group Hyungji I&C. The stock price has soared as it became a theme stock for Lee Jae-myung, the leader of the Democratic Party of Korea, suggesting that the company is raising capital through stock.

Hyungji Global announced its plan for a rights issue and free share issuance after the market closed on the 1st. The company decided to proceed with the rights offering after allocating shares to existing shareholders first and conducting a public offering if there are any unsubscribed shares.

Hyungji Global plans to raise approximately 2.05 billion won by issuing 6 million new shares at an expected issue price of 3,420 won. The 6 million new shares represent 90.6% of the existing number of issued shares (6,624,733 shares).

Hyungji Global intends to use 12 billion won of the funds raised through the rights offering for debt repayment, 7.1 billion won for operating capital, and 1.2 billion won for facility funds.

Hyungji Global will complete the procedures for the rights offering by June 20 and will subsequently conduct a free share issuance allocating 0.5 shares for each common share. Once the free share issuance is completed, the total number of issued shares will become 18,674,794 shares.

The timing of Hyungji Global's announcement of the rights offering and free share issuance is viewed by the financial investment industry as being related to the recent stock price trends.

Hyungji Global shares closed at 7,980 won on the Korea Securities Dealers Automated Quotations (KOSDAQ) on the 1st. The stock surged by 29.97% (1,840 won) compared to the previous day, hitting the upper limit (the upper limit of the daily trading price). Hyungji Global has continued its upper limit streak for four consecutive trading days since the 27th. During this period, the company's stock price rose by 185%.

The fact that Lee Jae-myung was acquitted in the second trial for violating the Public Official Election Act has acted as a catalyst. The stock of Hyungji Group became associated with Lee Jae-myung as it relates to the free school uniform policy he promoted during his time as mayor of Seongnam.

When stock prices are high, the amount of funds that can be raised through a rights offering also increases. Hyungji Global plans to determine the new share issue price based on the weighted arithmetic average stock price derived from the transaction amount and trading volume in May and June.

Hyungji I&C is also going through the process for a rights offering. On the 21st, the company announced a rights offering plan worth 20 billion won. The stock price of Hyungji I&C plummeted on the next trading day after deciding to issue new shares close to 90% of the total issued shares.

However, Hyungji I&C's stock price has been soaring since it hit the upper limit on the 26th. The stock price has nearly tripled from the 700 won range after the announcement of the rights offering to a closing price of 2,105 won on that day.