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

Sanghyun Park

I investigate special situations, pairs, and index rebalancing trades in Korea.

Korea / Special Sits, Pairs, Index Rebalancing

Equity Capital Markets

<a href="https://www.smartkarma.com/entities/1257" target="_blank" data-smartkarma-citation="entities:1257:1">Cammsys Corp (050110 KS)</a> said in a regulatory filing on June 16 that it would sell ₩25bil (US$22 million) worth of debt with BWs. Its "tentative" initial warrant exercise price was set at ₩2,930 per share. It was then re-adjusted to ₩2,665 on July 31, which was the decision day of warrant exercise price. These BWs will be used to fund facility expansion and working capital. The bookrunner is <a href="https://www.smartkarma.com/entities/9611" target="_blank" data-smartkarma-citation="entities:9611:1">Yuanta Securities Korea (003470 KS)</a>. Tomorrow and after tomorrow (Aug 7-8) are the subscription days for new shareholders.<div class="content-highlight">Cammsys' regulatory filing about this BW issuance:<a href="http://dart.fss.or.kr/dsaf001/main.do?rcpNo=20170731000342" target="_blank">http://dart.fss.or.kr/dsaf001/main.do?rcpNo=20170731000342</a></div><table class="table table-striped"><tbody><tr><td style="width: 332.8px;">Item</td><td style="width: 322.2px;">Detail</td></tr><tr><td style="width: 332.8px;">Type</td><td style="width: 322.2px;">Rights offering with standby underwriting</td></tr><tr><td style="width: 332.8px;">Maturity</td><td style="width: 322.2px;">4 years</td></tr><tr><td style="width: 332.8px;">Put option</td><td style="width: 322.2px;">2 years from issuance date</td></tr><tr><td style="width: 332.8px;">Total amount</td><td style="width: 322.2px;">₩25bil</td></tr><tr><td style="width: 332.8px;">Issuance date</td><td style="width: 322.2px;">Aug 10 (tentative)</td></tr><tr><td style="width: 332.8px;">Warrant exercise price</td><td style="width: 322.2px;">₩2,665 - finalized on July 31(Initial tentative price was set at ₩2,930)</td></tr><tr><td style="width: 332.8px;">Warrant exercise starting date</td><td style="width: 322.2px;">Sep 10, 2017</td></tr><tr><td style="width: 332.8px;">Warrant exercise closing date</td><td style="width: 322.2px;">July 10, 2021</td></tr><tr><td style="width: 332.8px;">Coupon rate</td><td style="width: 322.2px;">1.00%</td></tr><tr><td style="width: 332.8px;">YTM</td><td style="width: 322.2px;">3.00%</td></tr><tr><td style="width: 332.8px;">Repayment at maturity if warrant isn't exercised</td><td style="width: 322.2px;">108.4661% of principal investment</td></tr><tr><td style="width: 332.8px;">Re-fixing rate </td><td style="width: 322.2px;">70%</td></tr><tr><td style="width: 332.8px;">Total number of shares to be offered</td><td style="width: 322.2px;">9,380,863</td></tr><tr><td style="width: 332.8px;">As a % of shares outstanding before dilution</td><td style="width: 322.2px;">16.7%</td></tr><tr><td style="width: 332.8px;">As a % of shares outstanding after dilution</td><td style="width: 322.2px;">14.3%</td></tr><tr><td colspan="2" style="width: 655px;">Source: DART</td></tr></tbody></table>* Alright, let's find out more about this BW issuance, and let's also discuss whether we should take it or pass it.

Cammsys Corp (050110 KS) said in a regulatory filing on June 16 that it would sell ₩25bil (US$22 million) worth of debt with BWs. Its "tentative" initial warrant exercise price was set at ₩2,930 per share. It was then re-adjusted to ₩2,665 on July 31, which was the decision day of warrant exercise price. These BWs will be used to fund facility expansion and working capital. The bookrunner is Yuanta Securities Korea (003470 KS). Tomorrow and after tomorrow (Aug 7-8) are the subscription days for new shareholders.Cammsys' regulatory filing about this BW issuance:http://dart.fss.or.kr/dsaf001/main.do?rcpNo=20170731000342ItemDetailTypeRights offering with standby underwritingMaturity4 yearsPut option2 years from issuance dateTotal amount₩25bilIssuance dateAug 10 (tentative)Warrant exercise price₩2,665 - finalized on July 31(Initial tentative price was set at ₩2,930)Warrant exercise starting dateSep 10, 2017Warrant exercise closing dateJuly 10, 2021Coupon rate1.00%YTM3.00%Repayment at maturity if warrant isn't exercised108.4661% of principal investmentRe-fixing rate 70%Total number of shares to be offered9,380,863As a % of shares outstanding before dilution16.7%As a % of shares outstanding after dilution14.3%Source: DART* Alright, let's find out more about this BW issuance, and let's also discuss whether we should take it or pass it.

Samsung Electro Mechanics Co, Ltd. (009150 KS)

Cammsys ₩25bil BW Issuance Summary - Public Subscription Is Aug 7-8