Intops: "No Exercise of EB Call Options... Prioritizing Shareholder Value Enhancement"

Intops has firmly stated that it will not use the call option attached to its exchangeable bonds (EB) for the purpose of succession by the largest shareholder, addressing the recent controversy surrounding the matter.

On June 30, a representative from Intops said, “The exercise of the call option on the EB has no connection whatsoever to succession issues,” and added, “Intops will make decisions regarding the exercise of related rights solely with the utmost priority on protecting shareholder value and enhancing management transparency.”

Previously, Intops faced controversy over allegations that it was suppressing its share price through a call option attached to the 13 billion won EB issued last year, allowing the second-generation owner to increase their stake. In response, President Lee Jaemyung commented on social media, questioning, “Isn't this stock price manipulation?”

There are two call options attached to the Intops EB. The first allows Intops to directly redeem up to 30% of the total EB or transfer it to a third party designated by Intops. If Intops’ share price rises significantly above the conversion price and this call option is designated for the second-generation owner, the owner’s successor can acquire shares at a low price. Such call options have been previously used as tools for expedient succession in many companies.

The second call option allows Intops to redeem all of the EB if the share price exceeds 130%. If the share price surpasses 130% and the call option is exercised, there is a risk that institutional investors may convert all of their EBs into shares, potentially causing a sharp decline in the share price and creating an incentive for short selling. This is because, while the number of shares subject to conversion is 630,000, Intops' average daily trading volume is only around 100,000 shares.

Intops has acknowledged market concerns and stated that it is considering not exercising either of the two call options, as well as various measures to protect shareholder value and enhance management transparency.

In fact, following this controversy, Intops expressed its commitment to strengthening communication with the market to enhance shareholder value. Intops announced that it would cancel treasury shares worth 17.6 billion won and spend an additional 13 billion won to repurchase more treasury shares.

A company representative said, “We recognize that there has been a lack of communication with the market up to now,” and added, “Going forward, we will prioritize building trust and strengthening communication with the market to maximize corporate value.”

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