[At the Crossroads] Rn2 Technologies ② Sudden Withdrawal of 7 Billion Won Investor... Unfaithful Disclosure Risk Reignites

Issue Price Higher Than Market Value and Management Disputes Overlap
Potential for Exchange Sanctions if Terms Are Changed or Payment Is Delayed

It has been confirmed that the strategic investor (SI) seeking to become the largest shareholder of Kosdaq-listed company Rn2 Technologies through a paid-in capital increase of 7 billion won has withdrawn its investment. The company’s poor performance and ongoing management disputes have been cited as reasons for the withdrawal.

According to the investment banking (IB) industry on August 13, CCGI No.2 Investment Partnership, which had agreed to participate in Rn2 Technologies’ third-party allotment paid-in capital increase of 7 billion won, recently notified the company that it cannot proceed with the payment for the new shares.

On June 30, Rn2 Technologies decided to conduct a paid-in capital increase of 7 billion won targeting CCGI No.2 Investment Partnership. If completed, the partnership would receive 3,286,384 shares of Rn2 Technologies (19.45%), becoming the largest shareholder. The previous largest shareholder, Cross No.1 Investment Partnership, holds a 15.33% stake.

The withdrawal by CCGI No.2 Investment Partnership is mainly attributed to Rn2 Technologies’ poor business performance. The company has suffered losses of several billion won every year for the past three years. In the first quarter of this year, it also posted a significant net loss.

Frequent changes of the CEO and ongoing management disputes are also cited as reasons for the investment withdrawal. Rn2 Technologies has changed its CEO five times just this year. This is seen as indicating instability in management control.

Additionally, there have been several lawsuits related to management rights. In February, TS No.1 Investment Partnership, a previous largest shareholder of Rn2 Technologies, filed for a provisional injunction to inspect and copy company accounts and books. While TS No.1 Investment Partnership quickly withdrew the application, in April, Ms. Bae and one other person applied to convene an extraordinary shareholders’ meeting, and on the 3rd of this month, Mr. Park and two others filed a similar lawsuit.

With CCGI No.2 Investment Partnership’s withdrawal from the capital increase, Rn2 Technologies now faces an urgent situation. With little time left until the payment date on the 28th, the company must attract new investors.

However, the issue price for this capital increase is higher than the current share price, making it difficult to attract new investors. The new share price for the paid-in capital increase is set at KRW 2,130. Recently, Rn2 Technologies’ share price has been trading in the range of KRW 1,900 to KRW 2,000.

If Rn2 Technologies changes the amount of capital increase significantly or the payment is delayed further while attracting new investors, the Korea Exchange may impose penalty points. For Kosdaq-listed companies, if the paid-in capital increase amount is changed by more than 20% from the initial announcement or the payment date is postponed by more than six months, the company is designated as a non-compliant disclosure entity and accrues penalty points.

Moreover, Rn2 Technologies was designated as a non-compliant disclosure entity once before in March after canceling its paid-in capital increase decision and changing the amount for acquisition of shares and equity securities in another company by more than 50%. At the time, the company accrued seven penalty points, but they were replaced with a disclosure violation fine. If the penalty points again exceed 10 this time, Rn2 Technologies may be subject to a substantive review of listing eligibility.

A representative of Rn2 Technologies stated, “We have not received any official notice from CCGI No.2 Investment Partnership regarding withdrawal from payment for this paid-in capital increase,” adding, “The payment date for the capital increase is scheduled for the 28th and the process is proceeding as planned.”

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