This article was posted on the ChosunBiz MoneyMove (MM) site at 6:01 p.m. Jan. 21, 2026.
Matica Biotechnology, the U.S. cell and gene therapy (CGT) contract development and manufacturing organization (CDMO) unit of medical services specialist CHA Bio Group, is planning to issue convertible bonds (CBs) of up to 40 billion won. It is interpreted that the company chose external financing for operating funds as losses accumulated and financial difficulties deepened.
According to the investment banking (IB) industry on the 21st, Matica Biotechnology recently decided to issue unnamed, unsecured private CBs and has begun a demand survey targeting institutional investors. Shinyoung Securities was selected as the structuring agent, and it appears the company distributed an information memorandum (IM) to domestic private equity funds (PEFs) and asset management firms.
The issuance size was set at about 30 billion to 40 billion won. Although detailed terms such as the conversion price have not been finalized, the company reportedly first proposed a five-year maturity with an annual maturity interest rate of 8%. It is also expected to include an early repayment request right (put option) that would allow bondholders to demand early repayment starting one year after issuance.
Matica Biotechnology is said to plan to pour the funds raised from the CB issuance into operating capital. Accumulated losses have even drained operating funds. Founded in 2018 as a CGT CDMO specialist and a subsidiary of CHA Biotech, Matica Biotechnology recorded a cumulative net loss of 139.6 billion won through 2024.
Matica Biotechnology was originally seen as CHA Bio Group's future cash cow. It was called a foundry in the biotech industry because its business structure could generate stable profits once it secured order volumes. CHA Bio Group incorporated Matica Biotechnology as CHA Biotech's U.S. subsidiary and immediately began building the factory.
However, after the factory was completed in 2022, Matica Biotechnology's annual losses rose to as much as 40 billion won. Although it chose clinical-stage drug manufacturing as its core business, small and mid-sized U.S. biotech ventures had difficulty raising investment amid interest rate hikes, leading to delays in securing orders. Repeated postponements of clinical plans caused ongoing order delays and losses.
Matica Biotechnology's move to issue CBs is also seen as an emergency cash infusion. At the end of 2024 CHA Biotech planned to inject 20 billion won from a paid-in capital increase into Matica Biotechnology, but the capital increase plan was reduced amid shareholder opposition and the funding support fell through.
Some in the market even speculate Matica Biotechnology may be in such financial distress that it cannot operate the factory. The company has offered a high-interest card of an annual 8% maturity yield. Guaranteeing an 8% yield at maturity is striking compared with typical CB maturity yields of around 3%.
Domestic institutional investors are reportedly not very interested. Beyond reading the need to offer 8% annual interest on CBs as a sign of desperation to secure new funds, it is a negative that the funds to be raised are for 'operating capital' to cover losses rather than investment for future growth.
An IB industry source said, "Companies with manufacturing facilities generally consider bank loans before capital market financing, so the fact that they turned to CBs could mean loans were not available," adding, "The fact that the factory is in the U.S. is also a concern for domestic investors."
Meanwhile CHA Bio Group said it is reviewing various options to raise operating funds for Matica Biotechnology. A group official said, "We decided not to proceed with the CB issuance that was being pursued with Shinyoung Securities," adding, "Matica Biotechnology is reviewing various options to raise operating funds."