[E-Daily Reporter Park Sun-Yeop ] Enchem Co., Ltd. ( Enchem Co., Ltd.(348370)) announced on the 15th that its subsidiary, Enchem America Inc., will undergo a reverse triangular merger with a special purpose company (SPC) to be established as a subsidiary of The Grow Hub.
In the merger process, the SPC will be dissolved, and Enchem Co., Ltd. will continue to exist. The Grow Hub will issue new shares as consideration for the merger, and Enchem Co., Ltd. is expected to secure at least an 85% stake in The Grow Hub upon completion of the merger, becoming the largest shareholder. The stake held by existing The Grow Hub shareholders will be adjusted to 15%.
Following the merger, The Grow Hub will hold a 100% stake in Enchem Co., Ltd., creating a structure in which Enchem Co., Ltd. controls The Grow Hub. The Grow Hub’s board of directors will also be composed of directors appointed by Enchem Co., Ltd.
Enchem Co., Ltd., which manufactures and sells electrolyte solutions, has been valued at $400 million based on an external valuation. At the exchange rate in effect on that day, this amounts to approximately 596.88 billion won. Through this transaction, Enchem plans to raise funds in the U.S. capital market and lay the groundwork for expanding its local operations.
The merger is scheduled to take place on October 8. However, the merger ratio will be calculated and announced again after the establishment of the SPC is completed.
The key factor in the success of the transaction is whether The Grow Hub will maintain its NASDAQ listing. The Grow Hub has received a notice of intended delisting from NASDAQ for failing to meet minimum share price and financial requirements. It has currently filed an appeal with the NASDAQ Hearing Committee, and the delisting proceedings have been suspended pending the outcome of the hearing.
The Grow Hub plans to demonstrate that it can meet Nasdaq’s listing requirements after the merger based on the stock consolidation, the merger with Enchem Co., Ltd., and its investment fundraising plans. If Nasdaq ultimately denies continued listing or if trading in the stock is suspended or the company is delisted, the merger agreement may be terminated.
In the merger process, the SPC will be dissolved, and Enchem Co., Ltd. will continue to exist. The Grow Hub will issue new shares as consideration for the merger, and Enchem Co., Ltd. is expected to secure at least an 85% stake in The Grow Hub upon completion of the merger, becoming the largest shareholder. The stake held by existing The Grow Hub shareholders will be adjusted to 15%.
Following the merger, The Grow Hub will hold a 100% stake in Enchem Co., Ltd., creating a structure in which Enchem Co., Ltd. controls The Grow Hub. The Grow Hub’s board of directors will also be composed of directors appointed by Enchem Co., Ltd.
Enchem Co., Ltd., which manufactures and sells electrolyte solutions, has been valued at $400 million based on an external valuation. At the exchange rate in effect on that day, this amounts to approximately 596.88 billion won. Through this transaction, Enchem plans to raise funds in the U.S. capital market and lay the groundwork for expanding its local operations.
The merger is scheduled to take place on October 8. However, the merger ratio will be calculated and announced again after the establishment of the SPC is completed.
The key factor in the success of the transaction is whether The Grow Hub will maintain its NASDAQ listing. The Grow Hub has received a notice of intended delisting from NASDAQ for failing to meet minimum share price and financial requirements. It has currently filed an appeal with the NASDAQ Hearing Committee, and the delisting proceedings have been suspended pending the outcome of the hearing.
The Grow Hub plans to demonstrate that it can meet Nasdaq’s listing requirements after the merger based on the stock consolidation, the merger with Enchem Co., Ltd., and its investment fundraising plans. If Nasdaq ultimately denies continued listing or if trading in the stock is suspended or the company is delisted, the merger agreement may be terminated.
