On the morning of the 9th, furniture company KOAS's stock showed weakness. This followed the collapse of its acquisition of biotech corporation Novelty Nobility.
As of 9:10 a.m. that day, KOAS was trading at 8,000 won, down 480 won (5.66%) from the previous trading day. KOAS shares fell 9.3% the day before as well. After KOAS announced on the 22nd of last month that it would acquire management rights of Novelty Nobility, its stock surged from the 8,000-won range to the 14,000-won range.
KOAS issued a corrective disclosure the previous day saying the decision to acquire 2,441,009 new shares of Novelty Nobility (14.28% equity) had been canceled. It came about two weeks after the company announced the management takeover.
Earlier, KOAS and Novelty Nobility signed an investment agreement covering new shares and convertible bonds totaling 50 billion won. KOAS planned to inject funds into Novelty Nobility in three installments through March next year to complete the acquisition.
The day before, KOAS participated in a 15 billion won third-party allotment paid-in capital increase to acquire 2,441,009 common shares, and had planned to acquire convertible bonds (CB) worth 15 billion won in October. Finally, the structure called for KOAS to pay in 20 billion won on March 31 next year through a third-party allotment paid-in capital increase.
However, on the scheduled date for the first fund payment, Novelty Nobility notified KOAS of contract termination. The third-party allotment paid-in capital increase proposal was rejected at the board meeting due to opposition from existing shareholders. Most institutional investors who expressed an opinion did not agree to the sale to KOAS.
KOAS said legal counsel had been consulted and the company plans to file a further disclosure on how it will handle the situation.