SKC will push ahead with investment in glass substrates, a future core business, through a rights offering worth 1.1671 trillion won while also moving to improve its financial structure.
SKC said on the 12th that the final issue price for the rights offering was set at 99,500 won. Accordingly, SKC will newly issue a total of 11.73 million shares through this rights offering and raise a total of 1.1671 trillion won.
SKC plans to use the funds secured through the rights offering for investments in new businesses and for repayment of borrowing fund to strengthen financial soundness. Initially, SKC planned to allocate about 590 billion won to the glass substrate business and 410 billion won to borrowing fund repayment, but with the rise in the share price increasing the total amount raised, the company decided to expand the scale of borrowing fund repayment.
Because the glass substrate investment prepares in advance the maximum required funds for the next three years, the amount will be maintained at 589.6 billion won as originally planned, and the increase in proceeds this time will be used to expand the scale of borrowing fund repayment.
Accordingly, key financial metrics such as the liability ratio are expected to improve. As of the end of last year, SKC's liability ratio was about 230%. If it repays 410 billion won as originally planned, the ratio can be adjusted to the low 140% range, but as the repayment scale increases to 577.5 billion won due to the larger raise, the liability ratio is expected to fall to about 129%.
SKC cited improved first-quarter results and investor relations (IR) sessions held for global institutional investors in four cities including New York in the United States as the reasons for the successful rights offering. In its first-quarter earnings release, SKC achieved an EBITDA (earnings before interest, taxes, depreciation and amortization) profit of 10 billion won for the first time in 10 quarters, marking a turnaround in results. In addition, President Kim Jong-woo and other key executives attended the IR for global institutional investors to actively communicate plans for restoring profitability, restructuring the business with a focus on semiconductors, and pushing ahead with the glass substrate business.
Progress in commercializing glass substrates at subsidiary Absolics is also one factor behind the rebound in the share price. Absolics recently began a new project by supplying prototype "non-embedding (Non-Embedding)" glass substrates for next-generation network semiconductors to a U.S. communications semiconductor corporations. The product significantly boosts performance over existing substrates to suit high-frequency, high-integration environments.
An SKC official said, "Even in a difficult market environment, shareholders and investors deeply empathized with the recovery of SKC's fundamental competitiveness and the future value of the next-generation glass substrate business," adding, "Based on the funds secured, we will push ahead with the commercialization of glass substrates without a hitch and accelerate for stability, recovery and a leap forward through groundbreaking improvements in the financial structure."
Meanwhile, subscriptions for existing shareholders in this rights offering are scheduled to take place over two days, May 14 and 15, and the new shares will be listed on June 5.