Enchem Secures $200 Million Funding...Company Valued at $400 Million

Negotiations with global investors on capital call method

"Securing growth capital for U.S. operations locally"

The corporate value of Enchem America, the U.S. subsidiary of global electrolyte specialist Enchem, has been assessed at $428.3 million. Based on this valuation, Enchem has set the equity value of Enchem America's merger transaction at $400 million and plans to secure at least $200 million in local U.S. funding following the completion of the merger.

Enchem announced on July 29 that external evaluator Samdo Accounting Firm has assessed the fair value range of Enchem America shares to be between $379.728 million and $428.295 million.

Aerial view of Enchem's Georgia plant. Enchem

Enchem and Nasdaq-listed The GrowHub have agreed to set the equity value for the Enchem America merger transaction at $400 million within this valuation range. At the exchange rate applied on the disclosure date, this amounts to approximately KRW 596.9 billion.

The $400 million figure represents the transaction value determined based on the external assessment and discussions between both companies, rather than the actual market capitalization that will be formed on the Nasdaq after the merger.

The merger will be carried out through a reverse triangular merger, combining Enchem America with a special purpose company established by The GrowHub. After the merger, Enchem America will remain as the surviving entity, while Enchem aims to secure more than an 85% fully diluted stake in The GrowHub, thereby maintaining its position as the majority shareholder and preserving management rights over its U.S. business.

Enchem is targeting phased fundraising of at least $200 million through The GrowHub following the completion of the merger. Funds will be provided sequentially according to the capital call method, based on agreements with global investment firms and depending on the progress of the business and funding needs.

The funds raised will be used for Enchem America’s raw material purchases, securing working capital, operating the Georgia production facility, responding to North American customers, and expanding its U.S. business operations.

Instead of constructing new production facilities, Enchem plans to prioritize maximizing the utilization of its existing production base in Georgia. The company intends to secure raw materials and working capital in a timely manner to expand shipments of electrolytes for electric vehicles and energy storage systems, and also to strengthen its capabilities in product development and quality management for North American customers.

Previously, funding necessary for the U.S. subsidiary’s operations and business expansion had to be provided directly by Enchem’s headquarters through domestic corporate bonds, convertible bonds, capital increases, and other means.

After the merger, Enchem America will have a channel to raise funds directly from local U.S. investors based on its own business value and growth plans. Securing capital locally for U.S. operations may also reduce the cash burden that the parent company would otherwise face when injecting additional funds into the U.S. subsidiary in the future.

As a result, Enchem’s headquarters expects to be able to allocate its resources more flexibly for working capital management, addressing existing debt, and operating other global production bases such as in China and Europe.

An Enchem representative stated, “Based on this valuation, we plan to pursue local funding of at least $200 million to establish an independent growth foundation for our U.S. business,” adding, “Securing the funds needed for our U.S. operations locally will reduce the parent company’s additional capital burden and increase the overall financial flexibility of the group.”

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