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Kumyang headquarters. (Photo credit: Kumyang) |
[Alpha Biz= Paul Lee] Kumyang, a leading secondary battery manufacturer, has attracted an investment worth approximately 405 billion KRW (about 4000 billion KRW) from a Saudi Arabia-based company. Once the funds are received, Kumyang expects to settle most outstanding payments owed to its partner companies. The company plans to accelerate its management normalization through this and additional capital raising efforts.
On June 5, Kumyang announced a rights offering worth 405 billion KRW. The investor is SKAEEB Trading & Investment, a newly established entity affiliated with a construction and civil engineering firm based in Saudi Arabia. The payment date is scheduled for August 2.
Upon completion of the capital injection, Kumyang will be able to address its urgent liquidity issues. As of the end of Q1, the company reported current liabilities of approximately 701.8 billion KRW, including payables to subcontractors amounting to 333.5 billion KRW and short-term borrowings from financial institutions totaling 246.1 billion KRW. Meanwhile, current assets stood at about 103.5 billion KRW.
The proceeds from the rights offering will cover all payables and substantially reduce outstanding loans. The offering consists of 13 million common shares and 14 million redeemable preferred shares (RPS). The RPS carries no voting rights but offers a 2% dividend and 5% interest annually, with flexible redemption options. The issue price was set at 15,000 KRW per share, reflecting a 51.5% premium over the reference price, with a maturity of 10 years.
Following the issuance, SKAEEB will become Kumyang’s second-largest shareholder. The current largest shareholder is Chairman Ryu Kwang-ji, holding approximately 14.13 million shares (22.09%).
Earlier this year in March, Kumyang’s trading was halted after receiving a qualified audit opinion due to liquidity concerns. The accounting firm cited uncertainties about the company’s ability to continue as a going concern, largely stemming from significant capital investment in new battery plants, including the Gijang factory. A prior public rights offering to raise funds last year was unsuccessful.
Alphabiz Reporter Paul Lee(hoondork1977@alphabiz.co.kr)
