This article was displayed on the ChosunBiz MoneyMove site on Sep. 2, 2025, at 3:37 p.m.
LS Group's specialized company in wire and cable solutions, LS Cable & System, is pushing for the issuance of exchangeable bonds (EB) worth 400 billion won. The target for exchange is shares of LS Marine Solution, LS Cable & System's subsidiary for underwater cables. The funds raised will be used for investments related to offshore wind and underwater cables.
According to the investment banking (IB) industry on the 2nd, LS Cable & System has recently been in contact with several institutional investors, including multiple private equity fund (PEF) operators, regarding the issuance of EB. The target for exchange is LS Marine Solution, which LS Cable & System owns, and the scale is around 400 billion won.
Considering that the market capitalization of LS Marine Solution is about 1.2 trillion won as of this day, it constitutes over 33% of the total equity. As of the end of the first half of this year, LS Cable & System held 66.75% of the equity in LS Marine Solution. Therefore, it is highly likely that some of the amount will have conditions adjusted to prevent the exercise of exchange rights.
LS Cable & System chose to issue EB instead of liquidating through a block deal (a large-scale transaction outside regular trading). The need to sell at nearly 10% below market price and to disclose at least 30 days in advance appears to have had a burdensome effect.
An official in the IB industry noted, "If the stock price does not rise after issuing EB, it will be a burden for LS Cable & System, as it will remain as bonds," adding that, "It seems that LS Group believes that LS Marine Solution's stock price will rise in the long term."
LS Marine Solution is a subsidiary of LS Cable & System focusing on underwater cables. Both companies are actively increasing investments, leading to a steady demand for funds. LS Cable & System broke ground on the largest underwater cable factory in the U.S. in Chesapeake, Virginia, in April with an investment of about 1 trillion won.
LS Marine Solution recently decided to construct the world's largest underwater cable laying vessel. To secure funding, it conducted a paid-in capital increase of 417.8 billion won last month. The offering price was 21,350 won per share. The parent company, LS Cable & System, contributed 290.9 billion won by issuing short-term commercial paper (CP).
A representative of LS Cable & System stated regarding the EB issuance plan, "Nothing has been finalized."