This article was displayed on the ChosunBiz MoneyMove (MM) site at 3:42 p.m. on Apr. 28, 2026.
KOSDAQ-listed NGeneBio will carry out a capital reduction without consideration and a paid-in capital increase at the same time. Just six months after even taking on debt to buy a building, NGeneBio moved to raise capital by eroding existing shareholders' equity to secure operating funds.
According to the Financial Supervisory Service's electronic disclosure system on the 28th, NGeneBio disclosed on the 27th that it will conduct a capital reduction without consideration merging three common shares into one and a shareholder-allotted paid-in capital increase of about 22.4 billion won.
NGeneBio plans to improve its financial structure through the capital reduction and use the proceeds of the paid-in capital increase to expand its AI precision medical platform business. After the one-third reduction, NGeneBio's outstanding shares will decrease from 26,809,750 to 8,936,583, and 7.15 million new shares will be issued through the paid-in capital increase. Of the funds raised, 17.3 billion won will go to operating funds and the remaining 5.1 billion won will be used to repay debt.
For investors, it has become a situation where they must bear losses. When a capital reduction without consideration is followed by a paid-in capital increase, existing shareholders' equity is diluted, and they must also prepare separate funds to participate in the paid-in increase. In fact, NGeneBio's share price fell 420 won (25.53%) to close at 1,225 won on the 28th, the first trading day after the company released its plan for a capital reduction without consideration and a paid-in capital increase.
However, some say that, considering NGeneBio's current financial condition, this is not the timing to administer the "drastic remedy" of conducting both a capital reduction and a capital increase together.
According to NGeneBio's business report, as of the end of last year, capital stock stood at 25 billion won and total equity at 22.6 billion won. Since it is not immediately in a capital impairment state, a reduction is not an urgent matter. In 2024, capital stock was 19.8 billion won and total equity 17.7 billion won, and it did at one point fall into partial capital impairment; however, it escaped capital impairment last year through a merger with a pharmaceutical distributor.
From NGeneBio's perspective, which does not face a capital impairment issue, the backdrop to choosing a reduction and an increase appears to be the aim of improving the financial structure ahead of a paid-in capital increase for fundraising. If the blow is coming anyway, there may be an intent to take it all at once. Since its 2020 listing, NGeneBio has posted losses every year through last year, and accumulated deficits have reached 76.3 billion won.
An official at a capital markets firm said, "NGeneBio had been hanging on by posting annual losses while relying on paid-in capital increases and issuing CBs," adding, "In the end, without a drastic remedy, additional capital raising appears to have been difficult."
The problem is that NGeneBio, which carried out a paid-in capital increase for operating funds and liability repayment, took on debt just half a year ago for real estate shopping. NGeneBio signed a contract last September to purchase a building in Seongsu-dong, Seoul for about 23.7 billion won and completed the acquisition process around October, the following month. It raised the purchase funds by issuing 25 billion won in convertible bonds (CB). Of the 25 billion won raised through the CB, 21.5 billion won was used for the real estate purchase and the remaining 3.5 billion won was spent on operating funds.
An investment banking (IB) industry official said, "If the CB had been issued to secure operating funds instead of for a real estate purchase, wouldn't there have been no need for this paid-in capital increase accompanied by a reduction?" adding, "It is regrettable that, in the end, the company had to turn to shareholders to secure operating funds."