XCURE, which experienced a roller-coaster stock price flow as a beneficiary of the SK Telecom hacking incident, announced on the 2nd that the issuance price of its paid-in capital increase was set at 40% lower than the market price. Considering that XCURE had soared to the 6,000 won level at one point, the paid-in capital increase price of 1,422 won is somewhat disappointing for the company.
The company plans to use all the funds raised from the paid-in capital increase (11.3 billion won) for its USIM business. Concerns have arisen in the market that the company may have made an imprudent decision given its financial situation.
According to the Financial Supervisory Service electronic disclosure system (DART) on the 3rd, XCURE announced the first issuance price of the shareholder allocation paid-in capital increase, decided in May, to be 1,422 won. This is 973 won (40.2%) lower than the closing price on July 2. The final issuance price will be confirmed on August 5.
This paid-in capital increase will be conducted through a shareholder allocation followed by a general public offering of unexercised shares. If unexercised shares arise after subscription by existing shareholders for two days starting from the 7th of next month, the general public offering will take place from the 12th to the 13th of next month, with the new shares being listed on September 10.
When XCURE first decided on the paid-in capital increase in May of this year, it announced its goal of raising a total of 16.6 billion won. The allocated amounts were 15 billion won for operational funds such as the USIM business and 1.6 billion won for debt repayment, which amounts to about half of the market capitalization (30.9 billion won) at that time.
However, after the decision on the paid-in capital increase, the stock price began to decline, and the planned issuance price decreased from 2,070 won to 1,422 won. The amount to be raised also shrank to 11.3 billion won. The company corrected its announcement the previous day, stating that all the raised funds would be used for operational funds.
Shareholders are inevitably expressing a desire to participate in the paid-in capital increase. In the current lackluster stock price situation, there are cries to participate in the highly discounted paid-in capital increase as a way to 'average down.' According to NH Investment & Securities, 94.69% of XCURE's investors are at a loss, with an average revenue rate of minus (-) 53.31%.
The company will also conduct a bonus stock issuance at a ratio of 0.3 shares for each share held. The date for determining new share allocations is August 21. This strategy aims to enhance participation in the paid-in capital increase by granting rights to participate in the bonus stock issuance automatically to shares issued through the paid-in capital increase.
However, even if the paid-in capital increase is successful, it remains uncertain whether the company can use all the funds raised for operational needs due to financial constraints. This includes 1.6 billion won in short-term borrowings, with liquidity liabilities potentially reaching about 16.6 billion won within this year. Conversely, as of the end of March this year, the company's cash and cash equivalents amounted to only 10.7 billion won, indicating significant liquidity pressure.
In particular, the exercise period for the put options of the 3rd and 4th convertible bonds issued last year is coming in December this year. The total issuance size is 15 billion won, which represents 64% of the market capitalization (23.3 billion won) as of the 2nd of this month. The conversion price is set at 2,443 won, which is similar to the closing price (2,415 won) on the 2nd, making it unlikely that investors will exercise the conversion request without a stock price increase event.
XCURE noted, "(Since the stock price is poor) if investors file put option claims, we may pursue refinancing or liquidate financial assets of about 11.1 billion won that we hold for repayment."
Previously, XCURE's stock price surged due to benefits from the SKT USIM incident. The stock price, which was hovering in the 2,000 won range, soared to 6,500 won after recording consecutive daily limits for three trading days at the end of April. However, as the factors related to USIM disappeared, the stock price quickly declined. It currently remains in the 2,200 to 2,300 won range, the level prior to the USIM incident.