Automotive semiconductor specialist Nextchip will pursue additional capital increase to address concerns about capital erosion.
Nextchip noted on the 13th that major shareholder NC& and CEO Kim Kyeong-soo will actively participate in the capital increase to restore financial soundness by the end of this year.
Nextchip had initially planned to raise 40 billion won in a previous paid-in capital increase to resolve financial issues such as repayment of convertible bonds (CB) and securing operating funds. However, only 20% of the planned subscriptions were realized, resulting in a total of 7.6 billion won raised.
Fortunately, it is expected that the capital raised in this paid-in capital increase will immediately address the situation of complete capital erosion. However, additional funding will be necessary to maintain a stable capital structure until the settlement of account at the end of the year.
A Nextchip official said, "Although the short-term capital erosion concerns are alleviated with the recently secured 7.6 billion won, additional capital increase within the year is inevitable for long-term financial stability," adding, "The major shareholders and management will take the lead in participating to restore shareholder trust and push forward growth strategies without disruption."