1. What is LK Samyang’s Rights Offering?

LK Samyang has decided on a rights offering of 245 billion won to secure operating funds (195 billion won) and repay debt (45 billion won). The offering method is a rights issue followed by a public offering of unsold shares, with 0.39 shares allocated per share. The record date is October 1st, the subscription date is November 11th, the payment date is November 18th, and the new share listing date is December 2nd.

2. Why the Rights Offering?

LK Samyang experienced declining sales and an operating loss in the first half of 2025. Sluggish exports and increased selling, general, and administrative expenses are identified as the primary causes. The debt ratio is also on the rise, raising concerns about financial soundness. The rights offering aims to raise funds to improve the financial structure and expand investments in new businesses, particularly in promising areas like thermal imaging cameras and B2B solutions.

3. Impact on Investment

  • Positive Impacts:
    • Improved financial structure and operational stability
    • Expanded investment in new businesses and strengthened long-term growth drivers
  • Negative Impacts:
    • Potential stock dilution due to the increased number of issued shares
    • Downward pressure on stock price if the offering price is lower than the current market price

The unstable macroeconomic environment, including high interest rates and a rising exchange rate, can also influence investment decisions.

4. Key Considerations for Investors

  • Comparative analysis of the final offering price and current market price
  • Monitoring the planned use and actual execution of the raised funds
  • Reviewing the performance of new businesses and the recovery of existing businesses
  • Analyzing the impact of macroeconomic variables (exchange rate, interest rates, etc.)

LK Samyang’s rights offering presents both opportunities and risks. Investors should carefully analyze the factors presented above and make prudent investment decisions.