Lotte Tour Development to Acquire KRW 35 Billion in Convertible Bonds Early and Cancel Entire Amount, Resolving Overhang Concerns

Lotte Tour Development Co., Ltd. (032350) has decided to acquire a portion of its convertible bonds before maturity and to cancel the entire acquired amount. This measure aims to eliminate potential share conversion supply, alleviate concerns over stock dilution, and improve the company's financial structure.

On August 3, Lotte Tour Development publicly announced its decision to acquire its own convertible bonds prior to maturity. The target is KRW 35 billion out of the 8th-1 series convertible bonds issued in 2021, which is half of the total KRW 70 billion originally issued.

The planned repayment amount totals KRW 43,536,500,000 and includes interest accrued over approximately 4 years and 9 months.

This early acquisition is being carried out in response to the investor’s exercise of an early redemption option (put option). Investor NV8 Holdings requested early redemption for 50% of its convertible bonds on July 29. The decision appears to have been influenced by the continued drop in share price below the conversion price of KRW 12,762 following recent controversy over increased tourism promotion fund contributions, with the price failing to recover.

The company plans to acquire the convertible bonds on July 29. However, since the scheduled date is a public holiday, the actual payment will be made on July 31.

Lotte Tour Development plans to secure repayment funds from internal cash generated through the operation of Jeju Dream Tower. The acquired convertible bonds correspond to a potential conversion amount of approximately 2.74 million shares and will be entirely canceled by the company.

A company representative stated, “By canceling the convertible bonds, we have completely resolved market concerns over potential overhang and possible stock dilution. We also expect to reduce financial costs and improve the debt ratio, making this a shareholder-friendly decision that will further strengthen our financial structure.”

The spokesperson went on to say, “We will continue to pursue transparent management and active policies to enhance shareholder value, further building trust with the market and our shareholders.”

This early acquisition and cancellation of convertible bonds is seen as a shareholder-friendly policy by Lotte Tour Development, aiming both to reduce potential selling pressure and to raise shareholder value by improving the company's financial structure.

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