Medical artificial intelligence (AI) corporations Lunit said on the 30th it will pursue a shareholder allotment paid-in capital increase worth 250 billion won and a 1-for-1 stock dividend at the same time. The move aims to ease the burden of repaying the convertible bonds (CB) issued during the 2024 acquisition of its U.S. subsidiary Volpara.
Lunit said it held a board meeting that day and decided to carry out a paid-in capital increase totaling 250 billion won through a shareholder allotment followed by a public offering of forfeited shares. The number of new shares to be issued is 7,906,816, and the issue price is 31,650 won per share. Existing shareholders will receive 0.27 share for each share they hold. After the paid-in capital increase is completed, the company will also proceed with a 1-for-1 stock dividend, granting one common share for each common share.
The core background of this capital increase is the risk tied to the put option (early redemption right) attached to the roughly 171.5 billion won in convertible bonds issued at the time of the 2024 Volpara acquisition. As the window to exercise the put option on the bonds arrives in the first half of this year, the financial uncertainty has weighed on the market.
Lunit had said it had no plans for a paid-in capital increase, but explained that it decided on the issuance after concluding it was necessary to structurally resolve the put-option risk on the convertible bonds.
Of the funds raised, 98.5 billion won will be used to address the convertible bond put options. Through talks with bondholders, the company aims to induce partial exercise of the put options and repay or acquire about 50% of the total amount. The company expects this will not only reduce liability but also secure stability across its overall financial structure.
The market interprets that Lunit initially sought to raise funds via third-party allotment of convertible preferred shares (CPS) but shifted to a shareholder allotment paid-in capital increase after the effort fell short of expectations.
Lunit earlier said, regarding reports of a failed 200 billion won fundraising, that "during meetings with investment firms, discussions were proceeding at the level of 60–80 billion won." However, it appears the company judged that amount alone would be insufficient to ease the burden of the convertible bond put options.
The remaining 112.5 billion won will be invested in research and development (R&D) and overseas expansion. Lunit plans to invest in securing next-generation technologies, including developing a "multimodal medical science–specialized foundation model" that integrates analysis of imaging, pathology, and clinical data, to strengthen its competitiveness in AI-based cancer diagnosis and treatment decision support.
Chief Executive Seo Beom-seok of Lunit said in a letter to shareholders that day, "This paid-in capital increase is a decision made after careful discussion over the past two weeks," adding, "After closely reviewing various funding options, we concluded that a shareholder allotment public offering is the most suitable approach to resolve the convertible bond put-option risk while enhancing shareholder value."
He added, "At the regular shareholders meeting on Mar., I said there were no short-term plans for a shareholder allotment paid-in capital increase, so there was much deliberation before making this decision," and noted, "Afterward, uncertainty related to the convertible bond put options began to weigh on the market in earnest, and we judged that leaving it unaddressed could instead lead to damage to shareholder value over the mid to long term."
Seo also said, "We clearly recognize there is a short-term burden from share dilution," but emphasized, "By removing financial risk and stabilizing the structure through this paid-in capital increase, we are confident this is a responsible choice that will protect and grow shareholder value over the long term."
Seo said, "This year will be an inflection point where operating expense reductions and revenue growth become visible at the same time," adding, "We will do our best to make this capital increase Lunit's last capital raise."