KCC, a company listed on the Korea Exchange's main board, was weak in early trading on the 24th on news that it will issue exchangeable bonds (EB) backed by treasury shares amounting to 10% of its total outstanding shares.
As of 9:48 a.m. that day, KCC was trading at 360,500 won, down 56,500 won (13.55%) from the previous session.
Before the regular session opened that day, KCC disclosed a plan to use its treasury shares, saying it will cancel about 350,000 shares by the first quarter of next year and make grants of around 300,000 shares to its in-house employee welfare fund.
In particular, the company said it plans to issue EB backed by 882,300 treasury shares in the fourth quarter of this year. That equals 9.9% of all shares. The large EB issuance appears to be prompting selling by investors who had expected cancellation of treasury shares.
KCC said, "This plan aims to both return profits and strengthen long-term corporate competitiveness, while seeking to balance the interests of all stakeholders."