This article was displayed on the ChosunBiz MoneyMove (MM) site at 3:57 p.m. on May 12, 2026.
KOSDAQ-listed Optrontec will issue convertible bonds (CB) worth more than half of its market capitalization. The purpose of the fundraising is to repay previously issued CBs and lending. While this can ease the immediate cash burden, it is drawing attention because the financial burden could grow sharply if the share price does not rise above the conversion price.
According to the investment banking (IB) industry and the Financial Supervisory Service electronic disclosure system on the 12th, Optrontec decided on the 11th to issue the 18th and 19th CBs. For the 18th, Woori Private Equity Asset Management (Woori PE)'s Green ESG Growth No. 1 Private Equity Fund will pay in 25 billion won, and for the 19th, the largest shareholder, Choi Sang-ho Corporation, will pay in 10 billion won. This effectively raises funds at once equivalent to about 55.5% of its 63 billion won market capitalization.
Of the funds raised this time, Optrontec plans to use about 31.5 billion won, excluding roughly 3.5 billion won, to repay debt. The 18th CB proceeds will be used for about 10.5 billion won in lending from Choi Sang-ho Corporation and about 14.5 billion won for early redemption of the 15th CB, and the 19th CB proceeds will also be used for roughly 6.5 billion won for early redemption of the 15th CB. The remaining roughly 3.5 billion won will be executed as operating funds.
Although this capital raise by Optrontec is effectively using debt to pay off debt, it appears likely to resolve pressing financial issues for now. That is because the window for exercising the early redemption option on the 15th CB is coming due. The conversion price of the 15th CB is 2,772 won, and considering that Optrontec's current share price is in the 1,700-won range, investors are likely to demand redemption. The outstanding balance of the 15th CB amounts to 21 billion won, but Optrontec's cash and cash equivalents stood at only 2.1 billion won at the end of last year.
In addition, it has the effect of partially reducing the annual interest burden of 10 billion won. The interest rate on about 10.5 billion won that Choi Sang-ho Corporation provided to Optrontec as lending in two tranches in 2023 and 2024 is 12% per year, meaning the simple interest expense alone amounts to 1.2 billion won annually. With maturity coming up in June, the company chose to repay with the 18th CB instead of extending the maturity. The funds Choi Sang-ho Corporation receives in repayment will be funneled back into the company as the 19th CB funds. Because this is CB rather than in the form of lending, the company is expected to be able to significantly reduce its interest burden for the time being.
However, there are concerns that, judging by the terms of the newly issued CBs, the financial burden could grow over the long term. That is because clauses guaranteeing investor returns were included to solve the immediate cash problem.
Optrontec's 18th and 19th CBs both carry a 0% coupon rate and a 3% yield to maturity, which suggests the interest burden is not large, but they include a clause guaranteeing additional returns. In addition to the coupon registered through the Korea Securities Depository (KSD), the company agreed with investors to guarantee a separate rate of return. The additional guaranteed rate of return is an annual compound 4%, applied starting two years after the CB issuance.
The 18th CB, which will be paid in by an outside investor, also includes an internal rate of return (IRR) guarantee clause. If the investor exercises the early redemption option (put option), IRR of 3% is guaranteed up to two years from issuance of the CB, and IRR of 7% thereafter.
Ultimately, for this CB issuance to lead to improvements in Optrontec's financial structure, structural earnings improvement and a rising share price must back it up. Because the cash burden grows if CB investors choose redemption, the company needs to create an environment in which they can choose conversion into shares.
A source in the investment banking (IB) industry said, "From the company's standpoint, having additional guaranteed rates of return and IRR guarantee clauses in CBs that can seek high returns through conversion into shares are disadvantageous provisions," adding, "If a rise in the share price does not accompany this, this CB issuance is quite likely to burden the company's finances over the long term."