Former SOCAR CEO Lee Jae-woong has become the largest shareholder of KOSDAQ-listed U2Bio. NDS, a company under the broader Nongshim family, transferred all of its equity. NDS had shown signs of a dispute with the founder over U2Bio's business transition and sold the stake before the dispute dragged on.
U2Bio said on the 14th that former CEO Lee Jae-woong acquired all 30.13% of NDS's equity to become the largest shareholder. Lee's equity will increase to 44.11% from 19.00%. Lee used his own funds to acquire U2Bio equity at 5,084 won per share.
NDS abruptly sold its equity right after differences emerged with founder and CEO Kim Jin-tae over a business transition. U2Bio CEO Kim Jin-tae recently carried out a paid-in capital increase for Lee Jae-woong to convert the company into a venture holding company. Kim and Lee are alumni of Youngdong High School and are said to be close, sharing common ground as executives who succeeded in founding companies around the same period.
However, NDS expressed opposition to CEO Kim Jin-tae's plan. It believed that converting into a venture holding company would not create synergy with the existing business. It also worried about changes in the governance structure. To block U2Bio's paid-in capital increase, NDS even filed for a court injunction to prohibit the issuance of new shares. But when the court did not accept it, NDS chose to exit rather than enter into a full-blown dispute.
Still, the investment revenue is seen as not very large. In Oct. 2018, before U2Bio was listed, NDS invested about 4 billion won over the counter to acquire 12% equity. The following year, it invested 7 billion won in convertible bonds (CB) issued by U2Bio and, by exercising the conversion right before maturity in 2021, raised its equity to 30%.
The amount former CEO Lee Jae-woong paid to acquire all of NDS's equity was 17.3 billion won. By simple calculation, NDS exited at 17.3 billion won in four years after investing 11 billion won four years earlier to secure the equity.
U2Bio's share price recently surged above 5,000 won after the possibility of a management control dispute was raised, but until last month it was trading around 3,000 won. Lee acquired the equity at the recently surged share price level.
When U2Bio was traded on the KONEX market, its share price exceeded 20,000 won, but after it moved to the KOSDAQ market in 2023, the price fell below 10,000 won. The decline continued as earnings worsened.
NDS is a subsidiary of Mega Mart, led by Vice Chairman Shin Dong-ik, the third son of Shin Chun-ho, the founding chairman of Nongshim Group.