KOSDAQ-listed Enchem(348370) passed an amendment to bond terms at the 14th bondholders' meeting for convertible bonds (CB). With put options on 230 billion won becoming exercisable at the end of this year, the repayment burden that had been raised is entering a phase of relief for now.
Enchem said on the 27th that the amendment passed at the 14th CB bondholders' meeting held at the KFTA Hall in Seoul.
The amendment includes deleting the early redemption right, providing collateral, and phased repurchase and cancellation of the bonds. Accordingly, Enchem will repurchase and cancel the CB in stages over the next three years at 25 billion won each year, totaling 75 billion won. In 2029, it plans to repurchase the remaining CB in full.
Enchem issued about 250 billion won of 14th CBs in 2024. Of this, 200 billion won was to be used for facility funds and 50 billion won for operating funds.
The problem was that Enchem's share price had recently shown a sharp decline, leaving it in a position to repay a substantial amount when the put options become exercisable at the end of this year. As of the first half, Enchem's cash and cash equivalents were only 6 billion won, effectively leaving no capacity for repayment. In response, Enchem convened a bondholders' meeting and proposed deleting the call option, providing additional collateral, and phased CB repurchases.
With the CB term changes passed at this bondholders' meeting, Enchem has been able to ease its repayment burden.
Enchem plans to use this bondholders' meeting as an opportunity to increase predictability in medium- to long-term cash management and to strengthen cash flow management.
An Enchem official said, "The passage of this amendment is meaningful in that it eases short-term repayment pressure and secures a stable foundation for business operations," adding, "We will focus more on our financial structure and cash flow management while linking the competitiveness of our global electrolyte business to tangible profitability."