SK D&D's stock has plummeted following the announcement of a significant capital increase that will more than double the number of existing shares.
According to the Korea Exchange, as of 9:36 a.m., SK D&D shares were trading at 3,920 won, down 1,620 won (29.24%) from the previous trading day. Early in the session, the stock fell to 3,895 won, marking a new 52-week low.
The sharp decline in stock price is attributed to concerns over the dilution of existing shareholders' equity value due to the large issuance of new shares.
On the previous day, SK D&D announced in a regulatory filing that its board of directors had approved a rights offering worth 136.7 billion won. The funds raised will be used entirely for debt repayment.
The new shares to be issued will total 44,681,000 common shares, representing approximately 240% of the current total of 18,617,382 shares. The planned issuance price is set at 3,060 won per share, reflecting a 20% discount.
The record date for the new share allocation is September 2. Existing shareholders will receive rights to purchase about 2.4 new shares for each share they currently hold. Subscription for existing shareholders will take place from October 12 to 13, with the new shares expected to be listed on October 28.
Large capital increases typically lead to a decrease in stock prices as the number of shares increases, diluting the per-share value and ownership percentage of existing shareholders. While this capital increase is expected to improve the company's financial structure, the substantial size of the new issuance has raised concerns about increased short-term stock volatility.
* This article has been translated by AI.
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