CJ CGV fell more than 10% intraday on the 3rd. The drop is seen as stemming from difficulties in raising funds to repay its convertible bonds (CB).
As of 9:49 a.m. that day, CJ CGV was trading at 5,890 won on the Korea Exchange, down 680 won (10.35%) from the previous session.
The stock decline is analyzed as due to uncertainty over CJ CGV's financing.
CGV faces a situation in which, unless it exercises a call option on 300 billion won worth of CBs by June next year, a 3% interest rate will apply for one year. In addition, there is another 400 billion won CB maturing just one year later.
CGV sought to raise funds by issuing corporate bonds, but the market response was cold. This year, it attempted to issue 40 billion won and 100 billion won in hybrid securities and corporate bonds, respectively, but the hybrid securities drew only 30 billion won and the corporate bonds were entirely unsold.
Accordingly, CGV is also said to be contacting private equity fund (PEF) managers to secure financing.