According to the Financial Supervisory Service’s electronic disclosure system on the 13th, Bistos Co., Ltd. decided in March of this year to issue 4 billion won worth of private placement convertible bonds (CBs). Of the funds raised, 2 billion won was classified as working capital, and the remaining 2 billion won was designated for the acquisition of securities from other companies. At the time, the conversion price was 920 won, and the number of shares issuable upon conversion was 4,347,826, accounting for 18.91% of the total number of shares.
Subsequently, in May, the company underwent a stock split, adjusting the par value per share from 100 won to 500 won, which resulted in the conversion price being adjusted to 4,600 won. Although the number of potential convertible shares decreased as a result, the overhang (potential selling pressure) was not completely eliminated, as there remained a volume of securities that could be converted into shares in the future.
Consequently, the largest shareholder, CU MEDICAL SYSTEMS Inc., stepped in directly to support the defense of Bistos Co., Ltd.’s market capitalization. Previously, CU MEDICAL SYSTEMS Inc. had signed a share purchase agreement with the former largest shareholder in November of last year and, after completing the payment of the balance in January of this year, secured a 33.88% stake in Bistos Co., Ltd. The plan was to combine Bistos Co., Ltd.’s Class I and II patient monitoring devices and vital signs monitoring technology with CU MEDICAL SYSTEMS Inc.’s Class III cardiac defibrillator business to emerge as a comprehensive medical device company.
Following the acquisition, CU MEDICAL SYSTEMS Inc. was the sole participant in a 3.5 billion won third-party private placement conducted by Bistos Co., Ltd. last month. The largest shareholder directly injected cash to strengthen the company’s financial position. The raised funds were allocated as 2.5 billion won for facility investments and approximately 1 billion won for working capital.
Around the same time, Bistos Co., Ltd. also entered into a 2 billion won trust agreement for the repurchase of its own shares, with the aim of “stabilizing the stock price and enhancing shareholder value.” The simultaneous provision of funds by the largest shareholder and the company’s repurchase of its own shares is interpreted as demonstrating a commitment to defending the stock price and enhancing shareholder value.
On the 6th, Bistos Co., Ltd. decided to exercise its call option on 1 billion won worth of the 4 billion won in convertible bonds (CBs) it issued in March, proceeding to repurchase and cancel them before maturity. This move is seen as a preemptive measure to reduce the potential supply of shares that could be converted in the future, thereby effectively alleviating existing shareholders’ concerns about dilution of their stakes.
Meanwhile, CU MEDICAL SYSTEMS Inc. plans to follow up on its financial support by realizing the synergies in the medical device business between the two companies, as proposed at the time of the acquisition.
CU MEDICAL SYSTEMS Inc. official stated, “In the second half of the year, we plan to solidify sales and technical cooperation between the two companies to fully generate business synergies that will lead to improved performance.”
