KOSDAQ-listed company VUNO(338220) is plunging more than 23% early on the 31st on news it will push ahead with a rights offering. Investor sentiment appears to have weakened on word that a large volume of new shares, equivalent to about 45% of the current total number of shares outstanding, will be supplied to the market.
As of 9:25 a.m. that day on the KOSDAQ market, VUNO is trading at 5,680 won, down 23.24% (1,720 won) from the previous session.
It appears the share price fell after VUNO on the 28th decided on a 31.4 billion won rights offering with unsubscribed shares to be offered to the public.
A total of 6.3 million common shares will be newly issued in this offering. That equals about 44.99% of the existing total number of shares outstanding (14,001,823 shares). Existing shareholders will be allocated subscription rights of about 0.45 new share per share held. The preliminary issue price before finalization was set at 4,980 won per share, a 32.7% discount to the closing price of 7,400 won on the 28th. The record date to determine shareholders for the new share allocation is set for Oct. 2.
Of the 31.4 billion won to be raised, VUNO plans to use 20 billion won to repay debt. It aims to proactively redeem early the 3rd perpetual convertible bond (CB), which has a step-up (rate increase) clause kicking in from December, to ease financial pressure. The remaining funds will be used for research and development (R&D), sales and marketing, operating funds for overseas subsidiaries (10.624 billion won), and other related expenses (750 million won).
Subscriptions for existing shareholders will be held over two days, Nov. 9–10, and a public offering for any unsubscribed shares will take place on Nov. 12 and 13. The payment date for the subscription price is Nov. 17, and the new shares are scheduled to list on Nov. 30. The final issue price will be set on Nov. 4.