[Edaily Reporter Shin Ha-yeon ] ECOPRO BM CO., LTD.(247540), which announced a large-scale rights offering after the market closed the previous day, is trading down by about 4% in early trading.
According to MP Doctor on the 1st, as of 9:22 a.m. today, ECOPRO BM CO., LTD. is trading at 135,200 won, down 5.12% from the previous trading day.
In after-hours trading the previous day, the stock had plummeted by more than 17% during the session. This is believed to be due to dampened investor sentiment following the company’s announcement—made after the market closed on the 30th of last month—of a rights offering followed by a public offering of unsubscribed shares, totaling 1.19999988 trillion won.
According to the announcement, the number of new common shares to be issued is 9,900,990, with a par value of 500 won per share. The total number of shares outstanding prior to the capital increase was 97,830,434, and this capital increase will increase the total number of shares by approximately 10%.
Consequently, concerns are growing that the issuance of new shares could lead to dilution of per-share value, which is believed to have triggered selling pressure among existing shareholders.
The funds raised are scheduled to be used for facility investments (150 billion won), working capital (134.99988 billion won), and the acquisition of securities from other companies (915 billion won).
The parent company, ECOPRO CO., LTD., will acquire 4,366,131 shares of ECOPRO BM CO., LTD. for 529,175,070,000 won. As a result, ECOPRO CO., LTD.’s holdings in ECOPRO BM CO., LTD. will increase to 44,309,298 shares, raising its ownership stake to 41.13%.
At the same time, ECOPRO CO., LTD stocks—including ECOPRO (-7.50%), ECOPRO CO., LTD(086520)HN (-5.98%), and ECOPRO MATERIALS(450080)(-4.02%)—are all trading lower.
Regarding the decision to conduct a rights offering, Jeong Won-seok, an analyst at iM Securities, stated, “Given that the slowdown in electric vehicle demand, the delayed recovery of the cathode material market, and uncertainty regarding customer order volumes remain unresolved, the fact that a large-scale investment is being carried out could act as a burden for investors.” He added, “In particular, given that the industry’s recovery has not yet been sufficiently confirmed by earnings, the fact that fundraising involving shareholder dilution has taken place inevitably invites a negative interpretation in the short term.”