LifeSemantics Removes CB Refixing Clause... Strengthening Financial Stability

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Life Semantics announced on the 30th that it has deleted the refixing (conversion price adjustment) clause through an agreement with the holders of the 3rd tranche convertible bonds (CB).

The company explained that, as a result, the conversion rights related to the convertible bonds are recognized as equity rather than liabilities, improving the financial structure.

According to IFRS (International Financial Reporting Standards), if there is a refixing clause, convertible bonds are recognized as liabilities rather than equity. Additionally, the Korean Adopted International Financial Reporting Standards (K-IFRS) evaluate the fair value of financial instruments differently depending on stock price fluctuations. When the stock price rises, a trading loss occurs, and when it falls, it is reflected as an evaluation gain. In particular, CBs with a refixing clause cause changes in the number of convertible shares and are recognized as ‘financial liabilities,’ with related valuation gains or losses affecting net income.

Regarding the removal of the refixing clause, the company stated, “It means that investors are positively forecasting not only past performance but also future stock prices.”

Furthermore, the company expects that this financial structure improvement will provide momentum for promoting new businesses. A company representative said, "We will strive to enhance corporate value based on a stable financial structure and technological competitiveness."

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