SK D&D Rights Offering Closes With No Unsubscribed Shares: "Clearing Governance Risks and Normalizing Business"

Existing Shareholder Subscription Rate at About 97%... Majority of Existing Shareholders

Hahn & Co.'s Oversubscription Participation to Raise Its Stake by 2 Percentage Points

"Dispel Misconceptions About Governance Changes and Demonstra

SK D&D has completed a 136.7 billion won rights offering without any unsubscribed shares. Its largest shareholder, Hahn & Company (H&Co), also applied for oversubscription, and its stake is expected to rise by about 2 percentage points.

According to the electronic disclosure system on October 15, SK D&D completed the related procedures after receiving payment for the new shares that day. A total of 51,613,927 shares were subscribed for during the offering on October 12 and 13. The subscription rate was 115.52% of the 44,681,000 shares scheduled to be issued.

Existing shareholders subscribe for about 97%... oversubscriptions fill the rest

In a rights offering, new shares are first allocated to existing shareholders in proportion to their current stakes. Excluding oversubscriptions, the subscription rate among existing shareholders was about 97%. This figure includes H&Co's subscription, as it holds about 79% of the shares. If H&Co subscribed for all the shares allocated to it, the subscription rate among the other existing shareholders was lower.

The roughly 3% of shares that were not subscribed for were taken up through oversubscriptions. Oversubscription is a way for shareholders to apply to buy additional shares that other shareholders have declined to take up. H&Co made what is known as a "full subscription," applying for both its allocated shares and additional shares through oversubscription. As a result, no unsubscribed shares were left over.

Some minority shareholders had previously expressed concern that if any shares were left unsubscribed, H&Co's stake would increase and could pave the way for another attempt at a voluntary delisting. H&Co made two tender offers during the acquisition process but failed to reach the 95% stake required for delisting.

In a revised registration statement filed after the Financial Supervisory Service requested amendments, H&Co said it would not pursue a delisting for at least one year and would not seek to artificially increase its stake through market purchases or other means. It later voluntarily amended the filing, extending the period in which it would not pursue a delisting to "at least three years."

H&Co's participation in the oversubscription is expected to raise its stake by about 2 percentage points, but it will still remain well below the 95% threshold required for delisting.

"Strong response from existing shareholders... a turning point for business recovery"

The offering was launched to raise funds to repay 62 billion won in privately placed bonds maturing in October and to meet about 74.7 billion won in joint-guarantee obligations for interim-payment loans taken out by buyers of units at the Gunpo Triatz Knowledge Industry Center. Under a joint guarantee, the company promises to repay the loan if the buyer fails to repay the interim-payment loan. The company has said that without the offering, its cash balance would turn negative in October, making it difficult to avoid default.

The payment has secured funds to meet the obligations coming due, but it has not eased the business pressures, including the downturn in the knowledge industry center market, cited as a factor behind the company's financial difficulties.

"With H&Co, the largest shareholder, demonstrating its full commitment to support the company through action, and most existing shareholders responding positively, this can be seen as creating a turning point for the recovery of the business," an investment banking industry official said.

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