This article was published on Aug. 19, 2025, at 3:02 p.m. on ChosunBiz MoneyMove site.
KG Mobility, a vehicle manufacturer known better as Ssangyong Motor, is pushing ahead with plans to raise 170 billion won in new funding. This is interpreted as a measure to secure liquidity due to the rising risk of early repayment of previously issued 150 billion won convertible bonds (BW).
According to the investment banking (IB) industry on the 19th, KG Mobility recently decided to issue a bearer, non-guaranteed private placement convertible bond (CB) and began a demand survey for investors. Eugene Securities is in charge of issuing the bonds and has also started distributing the investment memorandum (IM) to private equity fund (PEF) managers and asset management companies.
The issuance scale is set at 170 billion won. The specific terms have not been finalized, but the company proposed an initial term of 5 years with a coupon rate of 0% and an internal rate of return (IRR) of 1% per annum. The conversion price will be determined based on future market prices, and downward adjustments (refixing) are expected to be included up to a certain level.
The stock-related bond (mezzanine) issuance by KG Mobility comes 2 years and 8 months after the issuance of 150.5 billion won BW in December 2023. At that time, KG Mobility issued a non-guaranteed public BW with a protected minimum return rate of 3% to secure operating funds for new vehicle development, parts, and raw material procurement.
Poor stock performance has led to additional funding. Starting from the end of this year, a number of investors are expected to choose redemption as soon as the exercise period for early repayment rights (put options) begins. The subscription rights for new shares have become worthless. KG Mobility's stock price is at around 3,400 won, which is only half the exercise price (6,729 won) of the BW.
KG Mobility is more famously known by the name Ssangyong Motor. After the company entered a second corporate rehabilitation procedure (bankruptcy protection) due to poor performance in December 2020, KG Group acquired Ssangyong Motor in August 2022 and changed its name to the current one. KG Eco Solution holds a 54.35% stake and is the largest shareholder.
Investor interest is said to be relatively strong. Following its incorporation into KG Group, the influx of investment and new vehicle launches contributed to a return to profitability in 2023 (5 billion won), and it has continued to post profits since then. KG Mobility has further expanded its operating profit margin, achieving an operating profit of 12 billion won on a standalone basis last year.
KG Mobility is set to begin launching a gasoline model of its sports utility vehicle (SUV), the Musso Sports (Khan), in the first quarter of next year, with a total of 7 new vehicles planned by 2023. Additionally, the company presented a target for record-high consolidated revenue of 5 trillion won and operating profit of 172.9 billion won for this year.
A source in the securities industry noted, "KG Mobility's CB has a coupon rate of 0%, so cash revenue is not significant, but safeguards such as refixing and put options are in place. If there is an improvement in performance, we can also expect capital gains from conversion, and many institutional investors are reportedly considering investing."