This article was published on July 31, 2025, at 6:08 p.m. on the ChosunBiz MoneyMove site.
Private equity firm IMM Credit & Solution (ICS) has initiated efforts to realize capital gains just two months after investing in the SNT Group. In May, ICS invested a total of 200 billion won in exchangeable bonds (EB) targeting key affiliates of the SNT Group.
EB is a bond that grants the issuer the right to exchange it for shares of other companies or its own shares. ICS exercised its exchange option for the SNT Holdings EB, which targets shares of SNT Energy. This means that the prospect of SNT Energy's common stock hitting the market has increased. Given that the volume is not insignificant, the securities industry advises individual investors to be wary of the overhang (large potential sell volume) risk.
According to the Financial Supervisory Service's electronic disclosure system on the 1st, ICS exercised its exchange rights for SNT Holdings EB on three occasions—on the 24th, 25th, and 29th of last month. Through this, it acquired 405,176 shares of SNT Energy. Based on the exchange price of 43,193 won, this amounts to 17.5 billion won.
The increase in SNT Energy's stock price is believed to have influenced ICS's decision to exercise the EB exchange rights this time. Generally, exchange rights are exercised when the stock price exceeds the exchange price for profit realization.
As of the 23rd of last month, SNT Energy's stock price was only in the 37,000 won range, but after the preliminary second-quarter results were announced the next day, it jumped by 33.1% to 49,250 won. SNT Energy's preliminary operating profit for the second quarter was recorded at 27.4 billion won, a 445.1% increase from the same period last year. The average estimate by securities firms (13 billion won) was significantly exceeded. During the same period, sales also increased by 109.2% to 140.7 billion won.
◇ Convertible shares remain… risk of stock price decline
The 17.5 billion won worth of common stock of SNT Energy that was converted earlier may have already been cleared during trading. On the 29th of last month, SNT Energy's stock price peaked at 55,000 won but has since dropped for two consecutive trading days by 6.18% and 4.36%, closing at 49,350 won.
Since ICS still has common stocks of SNT Energy that it can convert, there is also the possibility of further declines in the stock price. The remaining volume is 1,215,456 shares, valued at 52.5 billion won. This quantity corresponds to 5.87% of the total number of shares, which is considered sufficient to impact the short-term stock price.
An IB industry source noted, "It typically takes about 2 to 3 business days for stocks to be delivered after exercising the EB exchange rights, so ICS may have already thrown some volume into the market," adding, "Individual investors need to watch for any additional exercise of the exchange claims."
Earlier in May, the SNT Group issued a total of 200 billion won worth of EB. It faced criticism for this move, seen as a measure in response to the potential obligation to retire its own shares following amendments to the Commercial Code. ICS purchased 110 billion won worth of EB targeting SNT Dynamics's treasury shares, 70 billion won worth of EB targeting SNT Holdings's shares of SNT Energy, and 20 billion won worth of EB targeting the treasury shares of SNT Holdings.
The SNT Group has major affiliates including SNT Motiv, which operates in the defense and automotive parts business; SNT Energy, which supplies energy facilities such as air-cooled heat exchangers; and SNT Dynamics, a defense industry manufacturer of gearboxes for tanks.