Seongho Electronics is actively restructuring its increased debt following a merger and acquisition (M&A). The company is accelerating its "debt diet" by reducing stock collateral loans and corporate borrowings, thereby lowering interest costs.
According to investment banking sources on August 21, Seoryong Electronics, the largest shareholder of Seongho Electronics, has repaid 135 billion won of a 300 billion won loan secured against its shares, reducing the outstanding balance to 165 billion won. As the principal of the stock collateral loan decreases, the risk of additional collateral and forced sales due to stock price declines also diminishes.
Additionally, Seongho Electronics has issued the 20th convertible bond (CB) worth 89.5 billion won. The entire amount raised will be allocated to repaying existing borrowings, specifically targeting 69.5 billion won owed to Seoryong Electronics and 20 billion won owed to Woongjin Free Life.
Notably, the interest rates on the existing borrowings are 4.6% and 6.0%, while the new CB has a zero percent interest rate for both the nominal and maturity rates. The company explained that this will effectively reduce cash interest burdens by approximately 4.4 billion won on an annualized basis.
* This article has been translated by AI.
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