[Edaily Reporter Shin Ha-yeon] #Synergy Innovation, a manufacturer of microbial culture media, is set to enhance shareholder value by canceling all shares acquired through the exercise of call options on convertible bonds (CBs).

Synergy Innovation announced on the 5th that it has decided to cancel all shares held by the company acquired through the exercise of call options (right to sell) on its 14th series of convertible bonds on the 9th.

The bonds to be canceled are the 14th series of convertible bonds issued in December 2023, with a total face value of 4.55 billion won. The company had previously disclosed the exercise of the call option in March.

Through this cancellation, the company has completely eliminated the possibility of equity dilution resulting from the conversion of the convertible bonds into shares. Typically, when convertible bonds are converted into common stock, new shares are issued, which can dilute the equity value of existing shareholders; as such, the market perceives this as a potential overhang risk. By canceling the entire volume secured through the call option rather than reselling it, Synergy Innovation has completely eliminated this volume as a potential dilution factor.

Through this measure, Synergy Innovation plans to reaffirm its commitment to shareholder returns while alleviating the burden of potential debt to enhance financial soundness.

Park Jin-hyung, CEO of Synergy Innovation, emphasized, “The cancellation of this 14th series of convertible bonds is a decision aimed at enhancing shareholder value and strengthening shareholder-friendly policies,” adding, “We will continue to pursue responsible management that increases corporate value based on transparent communication with the capital market.”