Solux, the largest shareholder of the unlisted company Aribio, will acquire management control of CHA Vaccine Research Institute, a KOSDAQ-listed company, from CHA Biotech. Solux agreed to buy 14.7% equity held by CHA Biotech for 15.3 billion won, with part of the acquisition price to be settled through a substitution payment in which CHA Biotech acquires Solux's convertible bonds (CB).
Solux plans to review a merger between CHA Vaccine Research Institute and Aribio over the medium to long term. It also said it plans to change CHA Vaccine Research Institute's corporate name to "Aribio Research Institute," seek to turn the currently loss-making CHA Vaccine Research Institute to profit, and have Aribio focus on dementia clinical trials.
LED lighting company Solux said on the 19th that it decided to acquire 14.7% equity in CHA Vaccine Research Institute for 15.34 billion won. Solux said the decision was "to enter new businesses through the acquisition of management control and to secure financial soundness by improving profitability."
Of the 15.3 billion won, a 1.5 billion won deposit was paid on the 18th. The 7.5 billion won interim payment, half of the transaction price, will be offset by substitution payment using CB issued by Solux. CHA Biotech, which is selling CHA Vaccine Research Institute, will receive the CB as the interim payment instead of cash. The remaining 6.3 billion won will be raised by Solux through additional CB issuance, among other means.
CHA Biotech is selling 33.31% equity in CHA Vaccine Research Institute, of which Solux will acquire 14.7%, while the remainder will be acquired by Aribio Investment Purpose No. 13 (3.72%), Aribio Investment Purpose No. 15 (6.14%), and Tera Battery Solution (8.75%), respectively.
Solux plans to acquire management control of CHA Vaccine Research Institute to maximize synergy with the unlisted Aribio. The company said it is "also reviewing the possibility of a merger between the two companies."
To immediately normalize the financial structure of CHA Vaccine Research Institute, which continues to post losses, the company plans to transfer Aribio's revenue-generating businesses of cosmetics and bottled water sales to CHA Vaccine Research Institute. It is reviewing changing the corporate name of CHA Vaccine Research Institute to Aribio Research Institute.
A Solux official said, "To enable Aribio to focus on its core business of developing an Alzheimer's treatment, we plan to transfer ancillary businesses that are generating revenue—such as cosmetics, fillers, and bottled water sales—to CHA Vaccine Research Institute," adding, "Through this restructuring, we expect to boost CHA Vaccine Research Institute's revenue and improve its financial structure."
CHA Vaccine Research Institute's annual revenue is around 200 million won, and losses continue. If it does not add businesses capable of generating revenue, it could be designated as an issue for administrative oversight.
Solux is the largest shareholder of Aribio with 14.76% equity. It is pushing to merge with Aribio with a due date in June this year, but the Financial Supervisory Service has returned the securities registration statement several times, causing setbacks to the plan. The largest shareholder of Solux is Chief Executive Jung Jae-jun, the founder of Aribio, who holds 9.4% equity.
However, with Solux's acquisition of the KOSDAQ-listed CHA Vaccine Research Institute, the Aribio merger plan has entered a new phase.
Meanwhile, after news broke of Solux's decision to acquire CHA Vaccine Research Institute, the institute's share price has been plunging in the stock market. On the morning of the day, CHA Vaccine Research Institute shares fell more than 20%, sinking to an all-time low. Solux shares are also down more than 6%.