This article was displayed on the ChosunBiz MoneyMove (MM) site at 4:44 p.m. on Jun. 25, 2026.
Ark Solutions, listed on KOSDAQ, converted the convertible bonds (CB) of the unlisted SCL into shares about four years after investing. What stands out is that Ark Solutions is facing a delisting crisis and urgently needs cash, yet it did not demand repayment of the principal and instead converted to shares. The equity secured through the CB conversion is also not enough to exert influence over management control.
According to the investment banking (IB) industry and the Financial Supervisory Service's electronic disclosure system on the 25th, on the 24th Ark Solutions converted about 3 billion won worth of SCL CB invested in 2022 into shares. As a result, Ark Solutions acquired 50,000 shares of SCL, securing 3.16% equity.
The SCL CB invested in by Ark Solutions was issued in Apr. 2022 with a zero percent coupon and 3% maturity interest. The maturity was in Apr. last year.
In other words, even more than a year after the bond's maturity, Ark Solutions had still not received principal and interest. Through a disclosure, Ark Solutions said, "The debtor should have repaid the full principal and interest on the bond's maturity date, but has not fulfilled the repayment obligation to date," and noted, "We aim to resolve uncertainty over recovering principal and interest and to seek to enhance SCL's corporate value through a share conversion."
There are two points that raise questions about this choice. First, SCL is a profitable corporation. Last year it posted 4.7 billion won in revenue and 553 million won in operating profit, and as of the end of last year, total assets were 10.5 billion won and total equity was 3.654 billion won. Although the liability ratio is high at 187%, the reason for not repaying despite being profitable has not been disclosed. According to its website, SCL is understood to be engaged in filler business in China, Southeast Asia and other regions.
If a company does not repay its debt for a year despite being profitable, some may question what it means to secure a mere 3% equity. Since it is unlikely to treat shareholders properly, the explanation goes, it would be more rational to proceed with a lawsuit to recover the debt.
On top of that, Ark Solutions is in urgent need of a cash injection rather than securing growth momentum through acquiring other companies' equity.
Ark Solutions has posted operating losses for 10 straight years. As of the first quarter of this year, Ark Solutions held only 4.6 billion won in cash. By contrast, short-term borrowings due within a year amount to 8.3 billion won. It needs to secure cash assets immediately to continue operations and repay borrowings.
Given that Ark Solutions is at risk of delisting, it appears that raising funds on its own will not be easy. The Securities and Futures Commission under the Financial Services Commission in Jan. last year referred Ark Solutions' executives and employees to prosecutors for violating accounting standards in the 2020 financial statements and obstructing external audits. The Korea Exchange (KRX) decided to delist Ark Solutions in Jul. of the same year. Currently, with an application filed to suspend the effect of the delisting decision, the company is awaiting the court's judgment.
We sought comment on the details behind Ark Solutions' decision to forgo repayment and convert the CB, but could not obtain a response. An Ark Solutions official said, "It is difficult to connect you because the person in charge who can respond on the relevant procedures is not available."