Kwangdong Pharmaceutical withdrew its plan to issue exchangeable bonds (EB) backed by its treasury shares.
On the 28th morning, Kwangdong Pharmaceutical disclosed that it would withdraw its decision to dispose of treasury shares.
Kwangdong Pharmaceutical said, "After consultations with the lead manager, we decided to cancel the issuance of exchangeable bonds," adding, "The company plans to proceed with a paid-in capital increase for an affiliate through other financing methods."
Earlier, on the 20th, Kwangdong Pharmaceutical disclosed that it would issue a zero-coupon EB to Daishin Securities Co. targeting treasury shares worth 25 billion won. The exchange target was 3,793,626 treasury shares held by Kwangdong Pharmaceutical, equivalent to 7.24% of the total shares outstanding.
However, the Financial Supervisory Service (FSS) imposed a correction order on the 23rd regarding Kwangdong Pharmaceutical's issuance of exchangeable bonds (EB) backed by its treasury shares. The FSS judged that the company failed to sufficiently explain why it was using treasury shares despite having other financing options.
In addition, although Kwangdong Pharmaceutical disclosed that there were no separate plans to resell the exchangeable bonds after issuance and that the lead underwriter, Daishin Securities Co., would underwrite the entire amount, the FSS effectively determined this to be "false disclosure."
Starting on the 20th of this month, the FSS strengthened issuance disclosures with the aim of ensuring corporations provide sufficient information to investors when issuing EBs. As a result, Kwangdong Pharmaceutical became the first target of a correction.