Korea Union Pharmaceutical, a subsidiary of Bukwang Pharmaceutical, has completed most of its rehabilitation claims and has applied to the court for the closure of its rehabilitation process.
Bukwang Pharmaceutical announced on August 16 that Korea Union Pharmaceutical has requested the Seoul Rehabilitation Court to approve the closure of its rehabilitation process.
Korea Union Pharmaceutical began its rehabilitation process in September of last year and, after undergoing restructuring and financial improvement efforts, received approval for its rehabilitation plan in May of this year.
On May 27, Bukwang Pharmaceutical became the largest shareholder of Korea Union Pharmaceutical by fully paying 30 billion won for new shares. Following this, it proceeded with changes in rights and the repayment of rehabilitation secured claims as per the approved rehabilitation plan.
The rehabilitation secured claims were mostly settled in cash. The rehabilitation claims were divided into equity conversion (67.65%) and cash repayment (32.35%), with most interest waived since the initiation of the process, and the rights to existing convertible bonds (CB) and bonds with warrants (BW) expired as of the approval date.
This year, Korea Union Pharmaceutical has completed repayment of most of its debts, totaling 29.21 billion won, excluding 76 million won in some unconfirmed claims. Consequently, it has applied to the Seoul Rehabilitation Court for the closure of its rehabilitation process under the Debtor Rehabilitation and Bankruptcy Act.
A representative from Bukwang Pharmaceutical stated, "By investing 30 billion won in new shares, we have resolved the financial uncertainties of Korea Union Pharmaceutical and diligently executed the debt repayments as per the rehabilitation plan." They added, "Following the closure of the rehabilitation process, Korea Union Pharmaceutical's debt ratio has improved to the 40% range."
The representative further noted, "All past unpaid trade receivables, borrowings, and bonds with warrants have been settled, and currently, only normal claims such as trade payables and return provisions remain, effectively bringing the debt ratio to about 15%. We plan to promptly disclose the court's closure decision and accelerate management normalization and business synergy between the two companies."
Meanwhile, through the acquisition of Korea Union Pharmaceutical, Bukwang Pharmaceutical is expected to enhance its production competitiveness by securing a production line for injectable drugs and antibiotic products. The Korea Union Pharmaceutical factory, which received Good Manufacturing Practice (GMP) certification in 2020, is a state-of-the-art facility, and the company anticipates a roughly 30% increase in its pharmaceutical production capacity following the acquisition.
* This article has been translated by AI.
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