[Edaily Reporter Kim Hyung-il ] HLB Therapeutics(115450)announced on the 7th that it will conduct a third-party private placement worth 11.18103 billion won targeting its largest shareholder, HLB INC.(028300).

The new shares to be issued consist of 6,103,185 common shares, with an issue price of 1,832 won per share. The new shares are scheduled to be listed on September 8 and will be subject to a one-year lock-up period following the listing.

This capital increase will be carried out through a capital conversion process, in which convertible bonds (CBs) held by the largest shareholder will be converted into new shares. The structure involves offsetting the payment for the new shares against a total of 11 billion won in bonds held by HLB INC., consisting of 6 billion won in Series 17 CBs and 5 billion won in Series 18 CBs. HLB Therapeutics is now able to improve its financial structure by converting debt into equity without any cash outflow.

HLB Therapeutics also announced separately on the same day that it would repurchase the 5 billion won Series 18 CB prior to maturity. The repurchase amount is 5.07474 billion won, including principal and interest, following the bondholder’s exercise of the early redemption right (put option). The funds used for the repurchase will be offset against the payment for this third-party private placement, and the repurchased convertible bonds are scheduled to undergo the delisting process with the Korea Securities Depository.

HLB Therapeutics explained that the purpose of this capital increase is to repay debt and improve its financial structure through debt-to-equity conversion.