Korea / Special Sits, Pairs, Index Rebalancing, Clepsydra Capital

Sanghyun Park

Korea / Special Sits, Pairs, Index Rebalancing

Equity Capital Markets

<p>POSCO Chemical announced a massive rights offering.</p><p>The total offering is 16.5M shares for ₩1T. </p><table class="table table-striped">
<colgroup>
<col width="300">
<col width="300">
</colgroup>
<tbody>
<tr><td colspan="2" rowspan="1" data-sheets-value='{"1":2,"2":"Overview"}'>Overview</td></tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Issuer"}'>Issuer</td>
<td style="text-align: left;" data-sheets-value='{"1":2,"2":"Posco Chemical Co Ltd"}' data-sheets-formula='=googlefinance(R[1]C[0], "name")'>Posco Chemical Co Ltd</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Ticker"}'>Ticker</td>
<td style="text-align: left;" data-sheets-value='{"1":2,"2":"003670"}' data-sheets-formula='="003670"'>003670</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Target"}'>Target</td>
<td style="text-align: left;" data-sheets-value='{"1":2,"2":"Pubic offering of forfeited shares after offering to stockholders"}'>A public offering of forfeited shares after offering to stockholders</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Transferability"}'>Transferability</td>
<td style="text-align: left;" data-sheets-value='{"1":2,"2":"Renounceable"}'>Renounceable</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Volume"}'>Volume</td>
<td style="text-align: left;" data-sheets-value='{"1":3,"3":16475000}' data-sheets-numberformat='{"1":2,"2":"#,##0","3":1}'>16,475,000</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Bonus issue volume"}'>Bonus issue volume</td>
<td style="text-align: left;" data-sheets-value='{"1":3,"3":0}' data-sheets-numberformat='{"1":2,"2":"#,##0","3":1}'>0</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Preliminary price"}'>Preliminary price</td>
<td style="text-align: left;" data-sheets-value='{"1":3,"3":60700}' data-sheets-numberformat='{"1":2,"2":"[$₩-412]#,##0","3":1}'>₩60,700</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Preliminary value"}'>Preliminary value</td>
<td style="text-align: left;" data-sheets-value='{"1":3,"3":1000032500000}' data-sheets-numberformat='{"1":2,"2":"[$₩-412]#,##0","3":1}' data-sheets-formula="=R[-3]C[0]*R[-1]C[0]">₩1,000,032,500,000</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Oversubscription privilege"}'>Oversubscription privilege</td>
<td style="text-align: left;" data-sheets-value='{"1":3,"3":0.2}' data-sheets-numberformat='{"1":3,"2":"0.00%","3":1}'>20.00%</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Banker"}'>Banker</td>
<td style="text-align: left;" data-sheets-value='{"1":2,"2":"KIS, NH, &amp; KB"}'>KIS, NH, &amp; KB</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":" - Underwriting type"}'>- Underwriting type</td>
<td style="text-align: left;" data-sheets-value='{"1":2,"2":"Standby"}'>Standby</td>
</tr>
<tr><td colspan="2" rowspan="1" data-sheets-value='{"1":2,"2":"Source: DART"}'>Source: DART</td></tr>
</tbody>
</table><p>The offering carries a 27% capital increase with a 21.3% dilution. The ESOP takes 11.8%, putting the shareholder per-share allocation at 0.238.</p><table class="table table-striped">
<colgroup>
<col width="300">
<col width="300">
</colgroup>
<tbody>
<tr><td colspan="2" rowspan="1" data-sheets-value='{"1":2,"2":"Allocation"}'>Allocation</td></tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Common"}'>Common</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":60988220}' data-sheets-numberformat='{"1":2,"2":"#,##0","3":1}'>60,988,220</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Pref (incl. RCPS &amp; CPS)"}'>Pref (incl. RCPS &amp; CPS)</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":0}' data-sheets-numberformat='{"1":2,"2":"#,##0","3":1}'>0</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Total shares"}'>Total shares</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":60988220}' data-sheets-numberformat='{"1":2,"2":"#,##0","3":1}' data-sheets-formula="=R[-2]C[0]+R[-1]C[0]">60,988,220</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Treasury shares"}'>Treasury shares</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":0}' data-sheets-numberformat='{"1":2,"2":"#,##0","3":1}'>0</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Total shares ex treasury shares"}'>Total shares ex treasury shares</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":60988220}' data-sheets-numberformat='{"1":2,"2":"#,##0","3":1}' data-sheets-formula="=R[-2]C[0]-R[-1]C[0]">60,988,220</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Offer volume"}'>Offer volume</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":16475000}' data-sheets-numberformat='{"1":2,"2":"#,##0","3":1}' data-sheets-formula="=R[1]C[0]+R[2]C[0]">16,475,000</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":" - Common"}'>- Common</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":16475000}' data-sheets-numberformat='{"1":2,"2":"#,##0","3":1}' data-sheets-formula="=R[-16]C[0]">16,475,000</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":" - Pref"}'>- Pref</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":0}' data-sheets-numberformat='{"1":2,"2":"#,##0","3":1}'>0</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Per share allocation"}'>Per-share allocation</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":0.23825830627619562}' data-sheets-numberformat='{"1":2,"2":"#,##0.0000000","3":1}' data-sheets-formula="=R[15]C[0]/R[-4]C[0]">0.2382583</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Capital increase"}'>Capital increase</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":0.27013413409999504}' data-sheets-numberformat='{"1":3,"2":"0.00%","3":1}' data-sheets-formula="=R[-4]C[0]/R[-7]C[0]">27.01%</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Dilution"}'>Dilution</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":0.212681579722609}' data-sheets-numberformat='{"1":3,"2":"0.00%","3":1}' data-sheets-formula="=R[-5]C[0]/(R[-8]C[0]+R[-5]C[0])">21.27%</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Total shares after rights offer"}'>Total shares after rights offer</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":77463220}' data-sheets-numberformat='{"1":2,"2":"#,##0","3":1}' data-sheets-formula="=R[1]C[0]+R[2]C[0]">77,463,220</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":" - Common"}'>- Common</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":77463220}' data-sheets-numberformat='{"1":2,"2":"#,##0","3":1}' data-sheets-formula="=R[-12]C[0]+R[-7]C[0]">77,463,220</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":" - Pref"}'>- Pref</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":0}' data-sheets-numberformat='{"1":2,"2":"#,##0","3":1}' data-sheets-formula="=R[-12]C[0]">0</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Bonus issue"}'>Bonus issue</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":0}' data-sheets-numberformat='{"1":2,"2":"#,##0","3":1}' data-sheets-formula="=R[1]C[0]+R[2]C[0]">0</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":" - Common"}'>- Common</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":0}' data-sheets-numberformat='{"1":2,"2":"#,##0","3":1}'>0</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":" - Pref"}'>- Pref</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":0}' data-sheets-numberformat='{"1":2,"2":"#,##0","3":1}'>0</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Per share allocation"}'>Per-share allocation</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":0}' data-sheets-numberformat='{"1":2,"2":"#,##0.0000000","3":1}' data-sheets-formula="=R[-3]C[0]/(R[-6]C[0]-R[-14]C[0])">0.0000000</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Total shares after bonus issue"}'>Total shares after bonus issue</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":77463220}' data-sheets-numberformat='{"1":2,"2":"#,##0","3":1}' data-sheets-formula="=R[1]C[0]+R[2]C[0]">77,463,220</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":" - Common"}'>- Common</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":77463220}' data-sheets-numberformat='{"1":2,"2":"#,##0","3":1}' data-sheets-formula="=R[-7]C[0]+R[-4]C[0]">77,463,220</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":" - Pref"}'>- Pref</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":0}' data-sheets-numberformat='{"1":2,"2":"#,##0","3":1}' data-sheets-formula="=R[-7]C[0]+R[-4]C[0]">0</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"ESOP allocation"}'>ESOP allocation</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":1944050}' data-sheets-numberformat='{"1":2,"2":"#,##0","3":1}'>1,944,050</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":" - %"}'>- %</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":0.118}' data-sheets-numberformat='{"1":3,"2":"0.00%","3":1}' data-sheets-formula="=R[-1]C[0]/R[-17]C[0]">11.80%</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Stockholder allocation"}'>Stockholder allocation</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":14530950}' data-sheets-numberformat='{"1":2,"2":"#,##0","3":1}' data-sheets-formula="=R[-18]C[0]-R[-2]C[0]">14,530,950</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":" - %"}'>- %</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":0.882}' data-sheets-numberformat='{"1":3,"2":"0.00%","3":1}' data-sheets-formula="=R[-1]C[0]/R[-19]C[0]">88.20%</td>
</tr>
<tr><td colspan="2" rowspan="1" data-sheets-value='{"1":2,"2":"Source: DART"}'>Source: DART</td></tr>
</tbody>
</table><p>December 8 is the ex-rights, giving 1st-round pricing on December 4. You can trade subscription rights on December 28~January 5, shortly followed by the final pricing on January 8.</p><p>The subscription falls on January 13, followed by the listing on February 3 next year.</p><table class="table table-striped">
<colgroup>
<col width="300">
<col width="300">
</colgroup>
<tbody>
<tr><td colspan="2" rowspan="1" style="width: 723.636px;" data-sheets-value='{"1":2,"2":"Timetable"}'>Timetable</td></tr>
<tr>
<td style="width: 351.818px;" data-sheets-value='{"1":2,"2":"BOD meeting"}'>BOD meeting</td>
<td style="text-align: right; width: 350.909px;" data-sheets-value='{"1":3,"3":44141}' data-sheets-numberformat='{"1":5,"2":"yyyy. m. d","3":1}'>2020. 11. 6</td>
</tr>
<tr>
<td style="width: 351.818px;" data-sheets-value='{"1":2,"2":"Preliminary pricing"}'>Preliminary pricing</td>
<td style="text-align: right; width: 350.909px;" data-sheets-value='{"1":3,"3":44169}' data-sheets-numberformat='{"1":5,"2":"yyyy. m. d","3":1}'>2020. 12. 4</td>
</tr>
<tr>
<td style="width: 351.818px;" data-sheets-value='{"1":2,"2":"Ex-rights date"}'>Ex-rights date</td>
<td style="text-align: right; width: 350.909px;" data-sheets-value='{"1":3,"3":44173}' data-sheets-numberformat='{"1":5,"2":"yyyy. m. d","3":1}'>2020. 12. 8</td>
</tr>
<tr>
<td style="width: 351.818px;" data-sheets-value='{"1":2,"2":"Record date"}'>Record date</td>
<td style="text-align: right; width: 350.909px;" data-sheets-value='{"1":3,"3":44174}' data-sheets-numberformat='{"1":5,"2":"yyyy. m. d","3":1}'>2020. 12. 9</td>
</tr>
<tr>
<td style="width: 351.818px;" data-sheets-value='{"1":2,"2":"Subscription rights trade beginning"}'>Subscription rights trade beginning</td>
<td style="text-align: right; width: 350.909px;" data-sheets-value='{"1":3,"3":44193}' data-sheets-numberformat='{"1":5,"2":"yyyy. m. d","3":1}'>2020. 12. 28</td>
</tr>
<tr>
<td style="width: 351.818px;" data-sheets-value='{"1":2,"2":"Subscription rights trade ending"}'>Subscription rights trade ending</td>
<td style="text-align: right; width: 350.909px;" data-sheets-value='{"1":3,"3":44201}' data-sheets-numberformat='{"1":5,"2":"yyyy. m. d","3":1}'>2021. 1. 5</td>
</tr>
<tr>
<td style="width: 351.818px;" data-sheets-value='{"1":2,"2":"Final pricing"}'>Final pricing</td>
<td style="text-align: right; width: 350.909px;" data-sheets-value='{"1":3,"3":44204}' data-sheets-numberformat='{"1":5,"2":"yyyy. m. d","3":1}'>2021. 1. 8</td>
</tr>
<tr>
<td style="width: 351.818px;" data-sheets-value='{"1":2,"2":"Stockholder subscription"}'>Stockholder subscription</td>
<td style="text-align: right; width: 350.909px;" data-sheets-value='{"1":3,"3":44209}' data-sheets-numberformat='{"1":5,"2":"yyyy. m. d","3":1}'>2021. 1. 13</td>
</tr>
<tr>
<td style="width: 351.818px;" data-sheets-value='{"1":2,"2":"Public subscription"}'>Public subscription</td>
<td style="text-align: right; width: 350.909px;" data-sheets-value='{"1":3,"3":44214}' data-sheets-numberformat='{"1":5,"2":"yyyy. m. d","3":1}'>2021. 1. 18</td>
</tr>
<tr>
<td style="width: 351.818px;" data-sheets-value='{"1":2,"2":"Payment"}'>Payment</td>
<td style="text-align: right; width: 350.909px;" data-sheets-value='{"1":3,"3":44217}' data-sheets-numberformat='{"1":5,"2":"yyyy. m. d","3":1}'>2021. 1. 21</td>
</tr>
<tr>
<td style="width: 351.818px;" data-sheets-value='{"1":2,"2":"Listing"}'>Listing</td>
<td style="text-align: right; width: 350.909px;" data-sheets-value='{"1":3,"3":44230}' data-sheets-numberformat='{"1":5,"2":"yyyy. m. d","3":1}'>2021. 2. 3</td>
</tr>
<tr>
<td style="width: 351.818px;" data-sheets-value='{"1":2,"2":"Record date for bonus shares"}'>Record date - bonus shares</td>
<td style="text-align: right; width: 350.909px;" data-sheets-value='{"1":2,"2":"N/A"}'>N/A</td>
</tr>
<tr>
<td style="width: 351.818px;" data-sheets-value='{"1":2,"2":"Listing - bonus shares"}'>Listing - bonus shares</td>
<td style="text-align: right; width: 350.909px;" data-sheets-value='{"1":2,"2":"N/A"}'>N/A</td>
</tr>
<tr><td colspan="2" rowspan="1" style="width: 723.636px;" data-sheets-value='{"1":2,"2":"Source: DART"}'>Source: DART</td></tr>
</tbody>
</table><p>Pricing is nothing unusual at a 20% discount.</p><table class="table table-striped">
<colgroup>
<col width="300">
<col width="400">
</colgroup>
<tbody>
<tr><td colspan="2" rowspan="1" data-sheets-value='{"1":2,"2":"Pricing"}'>Pricing</td></tr>
<tr>
<td data-sheets-value='{"1":2,"2":"1st round"}'>1st round</td>
<td data-sheets-value='{"1":2,"2":"RP × (1 - 20%) / [1 + (27.01% × 20%)]"}' data-sheets-formula='="RP × (1 - "&amp;(R[11]C[0]*100&amp;"%")&amp;") / [1 + ("&amp;(R[12]C[0]*100&amp;"%"&amp;" × "&amp;(R[11]C[0]*100&amp;"%"&amp;")]"))'>RP × (1 - 20%) / [1 + (27.01% × 20%)]</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":" - Reference price (RP)"}'>- Reference price (RP)</td>
<td data-sheets-value='{"1":2,"2":"Min [Close, Avg (Close, 1W VWAP, 1M VWAP)]"}'><strong>Min [Close, Avg (Close, 1W VWAP, 1M VWAP)]</strong></td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":" - Reference date"}'>- Reference date</td>
<td data-sheets-value='{"1":3,"3":44169}' data-sheets-numberformat='{"1":5,"2":"yyyy. m. d","3":1}' data-sheets-formula="=Terms!R[41]C[0]">2020. 12. 4</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Ex-rights base price"}'>Ex-rights base price</td>
<td data-sheets-value='{"1":2,"2":"[RP + (1st × 27.01%)] / (1 + 27.01%)"}' data-sheets-formula='="[RP + (1st × "&amp;R[9]C[0]*100&amp;"%"&amp;")] / (1 + "&amp;R[9]C[0]*100&amp;"%"&amp;")"'>[RP + (1st × 27.01%)] / (1 + 27.01%)</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":" - Reference price (RP)"}'>- Reference price (RP)</td>
<td data-sheets-value='{"1":2,"2":"Previous close"}'>Previous close</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":" - Reference date"}'>- Reference date</td>
<td data-sheets-value='{"1":3,"3":44173}' data-sheets-numberformat='{"1":5,"2":"yyyy. m. d","3":1}' data-sheets-formula="=Terms!R[39]C[0]">2020. 12. 8</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"2nd round"}'>2nd round</td>
<td data-sheets-value='{"1":2,"2":"RP × (1 - 20%)"}' data-sheets-formula='="RP × (1 - "&amp;(R[5]C[0]*100&amp;"%")&amp;")"'>RP × (1 - 20%)</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":" - Reference price (RP)"}'>- Reference price (RP)</td>
<td data-sheets-value='{"1":2,"2":"Min [Close, Avg (Close, 1W VWAP)]"}'><strong>Min [Close, Avg (Close, 1W VWAP)]</strong></td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":" - Reference date"}'>- Reference date</td>
<td data-sheets-value='{"1":3,"3":44204}' data-sheets-numberformat='{"1":5,"2":"yyyy. m. d","3":1}' data-sheets-formula="=Terms!R[40]C[0]">2021. 1. 8</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Final"}'>Final</td>
<td data-sheets-value='{"1":2,"2":"Max [Min (1st, 2nd), 3D VWAP × 60%]"}'>Max [Min (1st, 2nd), 3D VWAP × 60%]</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":" - Reference date"}'>- Reference date</td>
<td data-sheets-value='{"1":3,"3":44204}' data-sheets-numberformat='{"1":5,"2":"yyyy. m. d","3":1}' data-sheets-formula="=Terms!R[38]C[0]">2021. 1. 8</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Discount rate"}'>Discount rate</td>
<td data-sheets-value='{"1":3,"3":0.2}' data-sheets-numberformat='[null,3,"0.00%",1]'>20.00%</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Capital increase rate"}'>Capital increase rate</td>
<td data-sheets-value='{"1":3,"3":0.2701}' data-sheets-numberformat='[null,3,"0.00%",1]' data-sheets-formula="=LEFT(Terms!R[11]C[0],6)*100/100">27.01%</td>
</tr>
<tr><td colspan="2" rowspan="1" data-sheets-value='{"1":2,"2":"Source: DART"}'>Source: DART</td></tr>
</tbody>
</table>

POSCO Chemical announced a massive rights offering.The total offering is 16.5M shares for ₩1T. 





Overview

Issuer
Posco Chemical Co Ltd


Ticker
003670


Target
A public offering of forfeited shares after offering to stockholders


Transferability
Renounceable


Volume
16,475,000


Bonus issue volume
0


Preliminary price
₩60,700


Preliminary value
₩1,000,032,500,000


Oversubscription privilege
20.00%


Banker
KIS, NH, &amp; KB


- Underwriting type
Standby

Source: DART

The offering carries a 27% capital increase with a 21.3% dilution. The ESOP takes 11.8%, putting the shareholder per-share allocation at 0.238.





Allocation

Common
60,988,220


Pref (incl. RCPS &amp; CPS)
0


Total shares
60,988,220


Treasury shares
0


Total shares ex treasury shares
60,988,220


Offer volume
16,475,000


- Common
16,475,000


- Pref
0


Per-share allocation
0.2382583


Capital increase
27.01%


Dilution
21.27%


Total shares after rights offer
77,463,220


- Common
77,463,220


- Pref
0


Bonus issue
0


- Common
0


- Pref
0


Per-share allocation
0.0000000


Total shares after bonus issue
77,463,220


- Common
77,463,220


- Pref
0


ESOP allocation
1,944,050


- %
11.80%


Stockholder allocation
14,530,950


- %
88.20%

Source: DART

December 8 is the ex-rights, giving 1st-round pricing on December 4. You can trade subscription rights on December 28~January 5, shortly followed by the final pricing on January 8.The subscription falls on January 13, followed by the listing on February 3 next year.





Timetable

BOD meeting
2020. 11. 6


Preliminary pricing
2020. 12. 4


Ex-rights date
2020. 12. 8


Record date
2020. 12. 9


Subscription rights trade beginning
2020. 12. 28


Subscription rights trade ending
2021. 1. 5


Final pricing
2021. 1. 8


Stockholder subscription
2021. 1. 13


Public subscription
2021. 1. 18


Payment
2021. 1. 21


Listing
2021. 2. 3


Record date - bonus shares
N/A


Listing - bonus shares
N/A

Source: DART

Pricing is nothing unusual at a 20% discount.





Pricing

1st round
RP × (1 - 20%) / [1 + (27.01% × 20%)]


- Reference price (RP)
Min [Close, Avg (Close, 1W VWAP, 1M VWAP)]


- Reference date
2020. 12. 4


Ex-rights base price
[RP + (1st × 27.01%)] / (1 + 27.01%)


- Reference price (RP)
Previous close


- Reference date
2020. 12. 8


2nd round
RP × (1 - 20%)


- Reference price (RP)
Min [Close, Avg (Close, 1W VWAP)]


- Reference date
2021. 1. 8


Final
Max [Min (1st, 2nd), 3D VWAP × 60%]


- Reference date
2021. 1. 8


Discount rate
20.00%


Capital increase rate
27.01%

Source: DART



POSCO Chemical Rights Offer: Terms & Trade Approach

Korea/Asia, Events, IPOs, Douglas Research Advisory

Douglas Kim

Korea/Asia, Events, IPOs

Equity Bottom-Up

<div class="content-highlight"><p>The US Presidential election is not over. At this point, it appears that Biden will win but it will go down to the wire and the final ruling is likely to be contested by either side and this case will likely go to the Supreme Court. At this point, we would put an 80-90%+ probability that Biden wins this US Presidential Election and a very long shot that Trump wins. In a scenario of a Biden win, the <strong>Korean rechargeable battery value chain</strong> remains one of the most attractive near-term candidates for market outperformance, in particular <strong><a href="https://www.smartkarma.com/entities/lg-chem-ltd" target="_blank" data-smartkarma-citation="entities:3583:1" rel="noopener">LG Chem Ltd (051910 KS)</a>,</strong> which has been beaten down recently.  </p></div>

The US Presidential election is not over. At this point, it appears that Biden will win but it will go down to the wire and the final ruling is likely to be contested by either side and this case will likely go to the Supreme Court. At this point, we would put an 80-90%+ probability that Biden wins this US Presidential Election and a very long shot that Trump wins. In a scenario of a Biden win, the Korean rechargeable battery value chain remains one of the most attractive near-term candidates for market outperformance, in particular LG Chem Ltd (051910 KS), which has been beaten down recently.  

Korean Rechargeable Batteries Value Chain: A Big Winner on a Biden Win & Global Climate Change Plans

Event-Driven

<p>The Korea NPS has a long history of siding with the major shareholders.</p><p>But the recent actions seen lately were quite different, of course, probably influenced by the current left-winged administration's political position.</p><p>So, voting against the LG Chem battery unit demerger shouldn't be a total surprise.</p>

The Korea NPS has a long history of siding with the major shareholders.But the recent actions seen lately were quite different, of course, probably influenced by the current left-winged administration's political position.So, voting against the LG Chem battery unit demerger shouldn't be a total surprise.

NPS Says No to LG Chem Split: October 30 Voting Race Update

<p>After the market close on 27 October, the Korea National Pension Fund Service (NPS) announced that it will likely to vote against LG Chem's plan to separate the rechargeable battery business. On 16 September, LG Chem announced its plan to separate the rechargeable battery business and since then its share price has declined 13% (15 September to 27 October). In our view, this is perhaps the biggest activist move by the NPS this year on a Korean large-cap company in 2020. </p><div class="content-highlight"><p>Overall, we believe there is a slightly higher chance of winning for NPS and other investors that are voting against the demerger plan, although it will be a close call. In addition, in the case that the company fails to get enough votes for the demerger, we believe this will have a favorable impact on LG Chem's share price. In addition, the company may try to find other ways to realize higher value for the entire LG Chem shareholders but at the same time conduct a different way to spin-off the battery business.</p></div>

After the market close on 27 October, the Korea National Pension Fund Service (NPS) announced that it will likely to vote against LG Chem's plan to separate the rechargeable battery business. On 16 September, LG Chem announced its plan to separate the rechargeable battery business and since then its share price has declined 13% (15 September to 27 October). In our view, this is perhaps the biggest activist move by the NPS this year on a Korean large-cap company in 2020. Overall, we believe there is a slightly higher chance of winning for NPS and other investors that are voting against the demerger plan, although it will be a close call. In addition, in the case that the company fails to get enough votes for the demerger, we believe this will have a favorable impact on LG Chem's share price. In addition, the company may try to find other ways to realize higher value for the entire LG Chem shareholders but at the same time conduct a different way to spin-off the battery business.

NPS Takes a Stand Against LG Chem's Plan to Separate the Battery Business

LG Chem's latest shareholder return plan is as follows.
At least 30% payout on consolidated earnings (including the battery unit)
A minimum yearly dividend of ₩10,000 per share for 2020~2022 (starting this year)
(Source: DART)The announcement was made on October 14 after the market closed. As a result, we began to see a widening in the 1P/ordinary price ratio.The 20MA sigma peaked at +2.5 (favoring 1P) on October 19. It now settles back at +0.34σ as the price ratio almost got back to the pre-announcement level.









Date
Price ratio
% of σ
1P
Ordinary


10/23/20
0.49769
34.11%
₩323,500
₩650,000


10/22/20
0.50391
75.70%
₩322,000
₩639,000


10/21/20
0.52512
202.03%
₩324,000
₩617,000


10/20/20
0.52174
220.57%
₩324,000
₩621,000


10/19/20
0.52033
245.22%
₩320,000
₩615,000


10/16/20
0.50547
167.36%
₩323,500
₩640,000


10/15/20
0.50549
179.89%
₩322,000
₩637,000


10/14/20
0.49045
54.32%
₩308,000
₩628,000

Source: KRX

1P's immediate surge relative to the ordinary share should have been no surprise as the year-end dividend yield difference was the highest since 2015.











Yield
2015
2016
2017
2018
2019
2020E


1P - DPS
₩4,550
₩5,050
₩6,050
₩6,050
₩2,050
₩10,050


1P - price
₩247,000
₩179,500
₩249,000
₩195,500
₩173,000
₩323,500


1P - dividend yield
1.84%
2.81%
2.43%
3.09%
1.18%
3.11%


Common - DPS
₩4,500
₩5,000
₩6,000
₩6,000
₩2,000
₩10,000


Common - price
₩328,500
₩261,000
₩405,000
₩347,000
₩317,500
₩650,000


Common - dividend yield
1.37%
1.92%
1.48%
1.73%
0.63%
1.54%


Difference
0.47%p
0.89%p
0.94%p
1.36%p
0.55%p
1.56%p


Difference/1P div yield
25.64%
31.91%
39.03%
44.13%
46.84%
50.48%

Source: SEIBro &amp; FnGuide

Any chance of seeing a dividend of more than the minimum guaranteed ₩10,000 this year?The local street consensus earnings (compiled by FnGuide) is ₩1.43T, which delivers a 53.7% payout ratio, well above the 30% threshold. So, this year? We should be complacent with ₩10,000.











Payout (₩B)
2015
2016
2017
2018
2019
2020E


NP to controlling interests
1,153.0
1,281.1
1,945.3
1,472.6
313.4
1,426.3


Dividends
331.3
368.1
460.1
460.1
153.6
766.5


- 1P
34.7
38.5
46.4
46.4
15.7
77.1


- Common
296.6
329.6
413.6
413.6
137.9
689.4


Payout
28.73%
28.73%
23.65%
31.24%
49.01%
53.74%

Source: SEIBro &amp; FnGuide



LG Chem Dividend Situation: 1P/C Trade, Div Play, & Hybrid of Combining Two

South Korea

LG Chem Ltd. is a chemical manufacturer.  The Company's products include petrochemicals, plastic resins, and engineering plastics.  LG Chem also produces industrial and electronic materials.

Price Gauge
52-week Range	0.00 - 0.00
Market Cap (USDm)	0.00
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LG Chem Ltd (051910 KS)

POSCO Chemical Rights Offer: Terms & Trade Approach

POSCO C offers ₩1T worth of new shares. It will likely address much of the recent concern that led to an 18% correction. So, an offering-triggered...

Sanghyun Park

Korean Rechargeable Batteries Value Chain: A Big Winner on a Biden Win & Global Climate Change Plans

In a scenario of a Biden win, the Korean rechargeable battery value chain remains one of the most attractive near-term candidates for market...

Douglas Kim

NPS Says No to LG Chem Split: October 30 Voting Race Update

The second-largest shareholder, Korea NPS, decided not to vote for the LG Chem battery unit split in the EGM scheduled for October 30. This insight...

Sanghyun Park

NPS Takes a Stand Against LG Chem's Plan to Separate the Battery Business

After the market close on 27 October, the Korea National Pension Fund Service (NPS) announced that it will likely to vote against LG Chem's plan to...

Douglas Kim

LG Chem Dividend Situation: 1P/C Trade, Div Play, & Hybrid of Combining Two

LG Chem's new 3-yr shareholder return plan opens up an entry point of several trades at this point. The hybrid of combining 1P/C pair trade and...

Sanghyun Park

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52-week Range

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P/E

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