This article was displayed on the ChosunBiz MoneyMove (MM) site at 4:07 p.m. on May 27, 2026.
KOSDAQ-listed UTI moved to issue additional convertible bonds (CBs) to roll over existing CBs but, as conditions proved unfavorable, ultimately decided to make partitioning repayments while promising investors high interest. CBs that were initially issued with no interest shifted to a structure that pays interest due to short-term liquidity issues and pressure for early redemption. With the UTG (ultra-thin glass) business about to ramp up, investor sentiment appears divided.
According to the Financial Supervisory Service's electronic disclosure system on the 27th, UTI discussed with bondholders to split the payment of the first CB's early redemption proceeds—originally slated for the 22nd—into three installments on the 22nd, the 29th, and July 5. In the process, as compensation for extending the early redemption, the company promised to pay investors additional interest at an annual compound rate of 15%.
The CBs whose redemption was postponed this time were issued by UTI in 2024. At issuance, both the coupon rate and maturity yield were set at 0%, terms relatively favorable to the company. Investors included securities firms such as Korea Investment & Securities Co. and Kiwoom Securities, as well as mid- to large-sized asset management firms. Considering UTI's future business, expectations appeared to reflect the possibility of realizing gains from a rise in the share price.
In fact, UTI raised about 54.1 billion won through CBs at the time and 25 billion won through a rights offering, investing in UTG (ultra-thin glass) production facilities. With its thinness and flexibility, UTG is used in bendable displays such as foldable phones. The plan was to build UTG production lines at the Vietnam plant that had produced cover glass for smartphone cameras and supply global smartphone manufacturers. Apple is widely seen as UTI's likely UTG business partner.
The problem is that UTI's UTG business has yet to deliver results, with weak earnings and a sagging share price persisting. UTI's share price, which was in the upper 30,000 won range when the first CBs were issued, has fallen to 23,400 won, sharply worsening CB investors' profitability. As the stock fell, the CB conversion price was reset down from 36,559 won to 25,592 won, but given the current price in the low 20,000 won range, there is no expectation of profit through conversion. Last year's operating loss was about 20 billion won, leaving the company in the red for five consecutive years since 2021.
As this situation continued, CB investors appear to have pressed for redemption. Indeed, after early redemption became available last month, some investors requested it, and the company reportedly asked investors to withdraw their early redemption requests.
However, with some early redemption requests actually made, short-term liquidity issues arose, and the company is pushing partitioning repayments while promising additional interest. UTI also issued an additional 10 billion won in CBs to address early redemption, but as the fund deposit date was set for the 29th—later than the original early redemption date of the 22nd—the partitioning repayment schedule appears to have been set to make use of those funds.
A source in the capital markets industry said, "It is uncommon for early CB redemption requests to be met with partitioning repayments," and noted, "Although there will be additional interest expenditure, the agreement with investors appears to have been reached smoothly."
UTI's stance on partitioning repayments for early redemption could not be obtained. A UTI representative said, "All the relevant staff members are unavailable, so it is difficult to respond."
Some expect that if UTI's mass production of UTG gains traction in the second half of this year and deliveries begin, results will rebound. In fact, from December last year to January this year, conversion requests were made for CBs totaling about 5.5 billion won. The conversion price was 26,213 won, a higher price than the share price of about 23,000 won at the time. The view is that they filed for conversion in advance with the possibility of UTI's future share price increase in mind.
UTI's CB redemption burden is expected to vary greatly depending on the future share price outlook. UTI's remaining CB balance currently exceeds 100 billion won. The industry believes that if UTG results, expected to ramp up in the second half, fall short of expectations, the CB redemption burden will be significant. An industry source said, "Ultimately, whether Apple collaborates on UTG will be the inflection point that determines the company's future."