HLB Group said on the 3rd that it will receive a $145 million (about 206.9 billion won) strategic investment from U.K.-based global asset manager LMR Partners.
LMR Partners will provide funding by investing in HLB Group's convertible bonds (mezzanine), with LMR Partners underwriting $140 million in bonds with warrants (BW) issued by HLB and $5 million in HLB exchangeable bonds (EB) to be issued by HLB Life Science.
HLB and HLB Life Science said on the 3rd that they each held a board meeting and approved the BW and EB issuance. LMR Partners is a global asset manager based in London, U.K., founded in 2009, with about $12 billion in assets under management (AUM).
HLB Group said this is the first inflow of global capital since its founding. The group said, "With HLB's resubmission for a liver cancer drug and a marketing application for a cholangiocarcinoma drug ahead, funds from an overseas asset manager are flowing in," and assessed it as a starting signal that collaboration with global capital is entering full swing.
According to the company, 15% of the total $140 million secured by HLB will flow in as immediately available funds upon closing of the transaction. The remaining 85% will be deposited in HLB's overseas escrow account and executed when the BW exercise conditions are met. The funds can be used only for the purpose of clinical development and global commercialization by Elevar, HLB's U.S. subsidiary.
HLB issued the BW in an inseparable structure with a single annual interest rate of 5% that integrates the coupon rate and the maturity yield. Warrants can be exercised starting one year after issuance. A condition was also included that secures the authority to request a forced exercise if parity (the ratio of the share price divided by the conversion price) reaches 115% or more of the issue price.
The company said, "The structure is a mutually balanced transaction in which the investor secures funding stability, while HLB Group secures warrant exercises premised on higher corporate value and minimizes dilution for existing shareholders."
HLB assessed that, because the put option can be exercised starting three years after the investment, it has gained financial leeway to steadily advance its new drug programs.
The transaction was completed with UBS, a global investment bank, acting as the sole bookrunner. HLB Group has expanded foreign equity holdings and, through consistent non-deal roadshow (NDR) activities, has broadened its global capital market network.
Im Chang-yoon, vice chairman for investments at HLB Group, said, "This transaction is the result of the overseas market recognizing the potential of the innovative new drug development the group has pursued," adding, "Based on these funds, we will accelerate global approvals and market entry for our core pipelines, leading to higher corporate value."