Chai Communications to Fully Repurchase KRW 15.5 Billion CBs: "Proactively Addressing Overhang and Dilution Concerns"

Chai Communications has announced plans to fully repurchase all of its convertible bonds (CB), aiming to alleviate market concerns over potential overhang. The company intends to exercise its issuer call option at 100%, thereby directly managing potential convertible shares and reducing the dilution burden for existing shareholders.

On May 22, Chai Communications stated that it will exercise the call option on the entire amount of its 2nd and 3rd series unregistered, coupon-bearing, unsecured private convertible bonds, totaling KRW 15.5 billion. The company plans to proceed with the related procedures within the exercise periods specified in each contract.

The company explained that this measure is a proactive decision to block potential market pressure arising from CB conversion. If both the 2nd and 3rd series CBs were to be converted into shares, the total number of potential new shares to be issued would amount to 3,569,372. Specifically, the 2nd series CB could convert into 1,133,319 shares, while the 3rd series CB could be converted into 2,436,053 shares.

If Chai Communications exercises the call option as planned and handles the bonds without conversion, it is expected to reduce concerns over a large-scale influx of new shares and ease the dilution burden for existing shareholders.

The 2nd series CB was issued in December last year to secure operating funds for strengthening the existing advertising and marketing business and expanding the content-centered commerce platform business. The issuance size was KRW 5.5 billion, with a coupon rate of 0% and a maturity rate of 3%. The maturity date is December 1, 2027, and the conversion price is KRW 4,853 per share. The issuing company can exercise the call option for the entire principal amount from October 22 to November 2, 2026.

The 3rd series CB, issued in April this year, was raised to expand the operational base of the business, amounting to KRW 10 billion. This CB also grants a full call option to the issuer. The coupon rate is 0%, the maturity rate is 3%, and the maturity date is April 30, 2028. The conversion price is KRW 4,105 per share, and the call option can be exercised from February 19 to March 22, 2027.

The company plans to not only reduce the potential dilution burden for shareholders but also accelerate the advancement of its AI platform-based business. By enhancing data analytics and content planning and operational efficiency through AI, it aims to strengthen its advertising campaign execution and performance management capabilities, focusing on expanding business competitiveness by integrating content with commerce.

A Chai Communications representative stated, "This CB repurchase plan is a measure to manage the supply and demand pressure arising from potential conversions and to protect shareholder rights," adding, "We will continue to review various measures to enhance shareholder value and make ongoing efforts to protect shareholder interests in the future."

This content was produced with the assistance of AI translation services.