[Edaily Reporter KIM SAE-MI ] AprilBio Co.,Ltd. has completed the payment for a third-party private placement totaling 346.8 billion won, which was targeted at TKG Huchems and an investment vehicle affiliated with IMM. While the largest shareholder in terms of equity is set to change to a special purpose company (SPC) established by IMM, the structure ensures that TKG Huchems—which appoints a majority of the board members—retains management control.

AprilBio Co.,Ltd.(397030)The company announced on the 23rd that payment for the third-party private placement totaling 346.8 billion won has been completed.

AprilBio Co.,Ltd. issued 3,608,595 shares of voting convertible preferred stock, 4,095,456 shares of common stock, and 1,222,254 shares of non-voting convertible preferred stock. The actual issuance amounts were 155 billion won, 141.8 billion won, and 50 billion won, respectively, totaling 346.8 billion won.

AprilBio Co.,Ltd. noted the significance of the fact that investors completed their payments without changing the issue price or investment terms agreed upon last month, despite the recent increased volatility in the biotech sector. The company emphasized that “the existing investment unit price was maintained without any separate repricing.”

The convertible preferred shares issued in this round include a clause that allows for the adjustment of the conversion price should AprilBio Co.,Ltd. issue new shares or equity-linked securities at a price lower than the existing conversion price in the future. The company’s emphasis on “no repricing” means that, during the payment process for this transaction, the issue price or contract terms were not readjusted due to a decline in the stock price.

The issue price for the voting convertible preferred shares is 42,953 won per share. TKG Huchems, the acquirer of management control, is purchasing 3,492,189 of these shares for approximately 150 billion won. Including the remaining shares, the total issue amount for the voting convertible preferred shares is approximately 155 billion won.

IMM acquired common stock and non-voting convertible preferred stock. The common stock was issued at 34,620 won per share, with IMM Healthcare No. 8 Limited Liability Company allocated 2,023,998 shares and IMM Scale-Up Bio No. 1 Limited Liability Company allocated 2,071,458 shares.

The issue price for the non-voting convertible preferred shares was 40,908 won per share. IMM Healthcare No. 8 Limited Company acquired 1,100,029 shares, and IMM Scale-Up Bio No. 1 Limited Company acquired 122,225 shares. IMM’s total investment in the common stock and non-voting convertible preferred shares amounted to approximately 191.8 billion won.

This transaction involves a structure in which the largest shareholder and the de facto controller are distinct. Once the private placement and the sale of shares held by CEO Cha Sang-hoon, the current largest shareholder, are finalized, AprilBio Co.,Ltd.’s largest shareholder is expected to change to IMM CO., LTD. No. 8 Limited Company.

Meanwhile, the board of directors is expected to consist of three registered directors nominated by TKG Huchems and two registered directors nominated by CEO Cha’s side. The directors nominated by CEO Cha’s side will include one independent director. Accordingly, TKG Huchems, which nominates a majority of the board members, will exercise management control over AprilBio Co.,Ltd.

On this day, AprilBio Co.,Ltd. changed the entity acquiring the new shares from the original IMM Asset Management to IMM Healthcare No. 8 Limited Liability Company. This does not involve the addition of new investors or changes to investment terms; rather, it represents a transfer of IMM Asset Management’s contractual status following the completion of the previously planned establishment of the private equity fund and the special purpose company (SPC).

IMM Healthcare No. 8 CO., LTD is an SPC established this month by IMM Healthcare No. 8 Private Equity Limited Partnership for the purpose of acquiring these new shares. IMM Asset Management serves as the general partner of the private equity fund, and KDB Capital is the largest investor, holding a 45.33% stake.

Under the co-investment agreement, TKG Huchems holds a call option to acquire all or part of the AprilBio Co.,Ltd. shares held by IMM’s investment vehicle from the date one year after the transaction’s closing until the date five years thereafter.

IMM holds a put option allowing it to require TKG Huchems to purchase all of its shares for a period of one month starting on the day following the fifth anniversary of the transaction’s closing. A tag-along right has also been established, allowing IMM to sell its shares alongside TKG Huchems should the latter decide to divest its stake.

AprilBio Co.,Ltd. expects its cash reserves to increase to approximately 440 billion won as a result of this investment. This cash balance is an estimate provided by the company. According to the disclosure, the 191.8 billion won raised through the issuance of common stock and non-voting convertible preferred stock is scheduled to be used for research and development expenses.

The company plans to allocate the secured funds toward expanding global clinical development, research and development of new pipeline candidates, and the acquisition of promising candidate compounds. The recent acquisition of a new drug candidate for metabolic diseases—based on Curigen’s dual-target small interfering RNA (siRNA) platform—is also part of its pipeline expansion strategy.

AprilBio Co.,Ltd. has been developing its business centered on its existing antibody-based sustained-release platform, “SAFA.” Going forward, the company plans to broaden its R&D scope to include new modalities such as siRNA, while also pursuing the acquisition of external pipeline technologies and joint research initiatives.

All newly issued shares will be subject to a one-year lock-up period. A total of 4,095,456 common shares are scheduled to be listed on August 13, while the convertible preferred shares will not be listed separately.

AprilBio Co.,Ltd. stated, “Despite fluctuations in the market environment, investors completed their payments without changing the existing contract terms,” adding, “We will use the secured funds to advance global clinical trials and new business initiatives to enhance our corporate value.”