South Korean chemical product manufacturer ECOPRO will issue an 80 billion-won ($67 million) bond exchangeable into shares of ECOPRO BM from July 12, 2020, to May 12, 2023.
The issuance date is June 12 and the exchange price per share is 133,100 won.
According to bank industry sources, ECOPRO will issue the bond to raise funds needed for the research and development of secondary battery materials. DS Investment & Securities, BNK Securities and DB Financial Investment are reportedly planning to buy the bond.
An exchangeable bond gives investors the option to exchange the bond for the stock of a company other than the issuer at some future date and under prescribed conditions.
ECOPRO focuses on manufacturing and selling eco-friendly precision chemical materials and secondary battery materials. As of the end of March, the National Pension Service has a 1.09 percent stake in the firm. ECOPRO posted 178.3 billion won in sales in the first quarter of this year. Its operating income was 10.6 billion won and net profit amounted to 6.3 billion won.
ECOPRO BM, which was spun off from its parent company ECOPRO in May 2016, is a company which leads the high-volume cathode material market at home and abroad. It recently decided to invest $86.5 billion won in new facilities in Yeongil Bay Industrial Complex in Pohang, North Gyeongsang Province, to expand the supply of materials for electric vehicle batteries. ECOPRO BM, which is considered a beneficiary of the electric vehicle era, reorganized its business in 2013 to focus on high-nickel cathode materials. It has the world’s second-largest market share following Sumitomo Metal Mining, which currently supplies Tesla. (Reporting by Sehun Jo)