This article was published on the ChosunBiz MoneyMove (MM) site at 2:02 p.m. on Jan. 13, 2026.
Institutional investors in convertible bonds (CBs) issued by Youil Energy Tech, a company specializing in secondary battery process equipment, chose to recover their investments early. As the secondary battery industry weakened and the company's financial structure deteriorated, its stock price fell, leading investors to conclude it would be difficult to realize gains by converting to common stock.
On the 13th, the investment banking industry said institutional investors such as Kansus Asset Management and GVA Asset Management recently requested early redemption of CBs from Youil Energy Tech. It has been about one year and eight months since Youil Energy Tech issued an unsecured private placement CB worth 20 billion won to those institutional investors in May 2024 as the second tranche.
Institutional investors' requests for early redemption of CBs began on the 9th. Youil Energy Tech disclosed that, due to bondholders' early redemption requests, it acquired 8.5 billion won, or 42.5% of the second-tranche CB issuance, before maturity. It was learned that early redemption requests were also made for the remaining 11.5 billion won worth of securities.
Institutional investors seemed to decide it was better to recover principal with a low guaranteed return of about 2% per year, since there was no sign of Youil Energy Tech's stock rebounding. At the time the CBs were issued, the stock traded around 3,500 won per share, but it has fallen to about 1,100 won, or roughly one-third of that level.
The current stock price was found to be well below the lower bound of the conversion price for the second-tranche CB. At the time the CBs were issued, the conversion price was 3,771 won and the minimum adjusted price was 2,640 won. After a paid-in capital increase and a free capital increase, the lower bound of the conversion price was adjusted down to 1,747 won, but institutional investors still remained in the loss zone.
Youil Energy Tech's severe financial deterioration also led all institutional investors to request early redemption before maturity. Since listing on the KOSDAQ in 2021, the company posted operating losses on a consolidated basis for four consecutive years through 2024, and it recorded an operating loss of 5.4 billion won through the third quarter last year. Its debt ratio exceeded 320%.
Institutional investors reportedly see little chance of Youil Energy Tech's stock recovering. Although the company raised about 19.5 billion won in its first paid-in capital increase after listing, the funds were directed to debt repayment rather than facility investment for the future. Last year, it also sold a factory in Osan, Gyeonggi Province.
A representative of an asset management firm that mainly invests in CBs said, "Requesting early redemption after acquiring CBs of KOSDAQ-listed companies with low interest rates is effectively an investment failure," but added, "Youil Energy Tech's expansion into the hydrogen fuel cell business, introduced to respond to the secondary battery market slump, fell short of market expectations."
Meanwhile, Youil Energy Tech faces the risk of being designated a "stock requiring caution for investors." A KOSDAQ-listed company is classified as a sign of possible insolvency if it records operating losses for five consecutive years after listing. Youil Energy Tech posted operating losses for four consecutive years through 2024 and is estimated to have recorded an 8.8 billion won loss last year.