Kyobo Securities announced on October 22 that its board of directors has approved a capital increase of 300 billion won through a third-party allocation.
The capital increase will involve issuing two types of redeemable convertible preferred shares (RCPS) with different redemption timelines.
In the first phase, 200 billion won will be raised by issuing 7,652,91 new shares at a price of 26,454 won per share.
The third-party allocation recipients include Trinique K.S. First and Felix K.R.C. Third.
The initial preferred dividend rate is set at 5.993% per annum, with redemption starting on October 30, 2029.
The remaining 100 billion won will also be raised at the same price, issuing 378,145 new shares.
The third-party allocation recipients for this phase include Felix K.R.C. Second and Korea Investment & Securities.
The initial preferred dividend rate for this tranche is 5.814%, with redemption available starting October 30, 2028.
Korea Investment & Securities will invest a total of 35 billion won in both capital increases, while Hyundai Motor Securities will contribute 10 billion won to the 200 billion won increase. The remaining 255 billion won will be allocated to a special purpose company (SPC).
The issued preferred shares will have no voting rights and will be subject to a one-year lock-up period. The payment date for the capital increase is set for October 30.
Kyobo Securities plans to use the funds raised to strengthen its operational capabilities in existing businesses.
A company representative stated, "The issuance of redeemable convertible preferred shares aims to enhance core business capabilities and expand new business opportunities through capital expansion, beyond mere growth in size. We plan to establish a virtuous cycle that leads to operational activation through improvements in net profit and financial structure, securing sustainable growth momentum."
As of the first half of this year, Kyobo Securities' standalone equity capital stands at 2.2406 trillion won. If the new capital is simply added, it will increase to around 2.5 trillion won, but it will still fall short of the 3 trillion won equity capital requirement for entry into the comprehensive investment securities sector.
Recently, there has been intense competition among small and medium-sized securities firms to increase their equity capital in pursuit of entry into the '11th comprehensive investment securities firm.'
Earlier, Hanwha Investment & Securities completed a 500 billion won capital increase, while Woori Investment & Securities aims to enter the sector by receiving 1 trillion won from Woori Financial Group this year and planning an additional 800 billion won capital increase by next year.
* This article has been translated by AI.
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