Korea Securities Dealers Automated Quotations (KOSDAQ) listed company Hyungji I&C announced on the 29th that the subscription result for its capital increase was counted at 8,739,402 shares from existing shareholders. The overall subscription rate was only 30.66%, falling short of expectations.
The failure of this capital increase is a reflection of concerns that arose as Hyungji I&C was recently classified as a political theme stock of Lee Jae-myung, the Democratic Party of Korea presidential candidate, leading to a sharp rise in its stock price. The market is speculating that the stock price, which soared after the presidential election, may undergo a significant adjustment.
Hyungji I&C originally planned to conduct a capital increase of 28.5 million shares (39 billion won), but only about 8.73 million shares, which is about 30% of the total, will be issued. This amounts to about 11.9 billion won. The remaining unsubscribed shares will not be issued.
When Hyungji I&C pushed for this capital increase in March of this year, the initial issuance price was 704 won, but as the stock price skyrocketed around April, the final issuance price jumped to 1,371 won, almost doubling. Consequently, the total issuance scale also increased from about 20 billion won to 39 billion won.
Hyungji I&C's stock price surged due to connections with Lee Jae-myung's free school uniform policy initiated during his time as the mayor of Seongnam. The stock price, which was hovering around 700 won at the end of March, rose to the 2,800 won range in just seven trading days. After experiencing sharp fluctuations, the stock price recorded in the 1,790 won range on that day.
Hyungji I&C plans to use the funds secured this time for debt repayment and operational funds.