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

HMM Is Likely the First to Be Subject to the Mandatory Offer that Comes into Force

Privatization of HMM: Enormous Shares Dilution Risk

Privatization of HMM: Hapag-Lloyd, Harim, Dongwon, and LX Groups [Short-Listed Bidding Candidates]

HMM CB Conversion on June 30: Shareholding Dilution & Float Reduction Risks

HMM, Another Massive CB Conversion (Share Dilution) Risk & Short Trading Opportunity

HMM CEO Letter to Shareholders Concerning Share Price Decline

Clepsydra Capital

Investigate special situations, pairs, and index rebalancing trades in Korea.

Event-Driven

<p>In a regulatory filing, HMM said it had decided to repay 600 billion won worth of permanent CB (#191 owned by KOBC: Korea Ocean Business Corporation) in advance. That is, HMM will exercise its right to claim for early redemption. If the CB holder (KOBC) agrees, HMM will make the CB repayment on December 9.</p><p><a href="https://engkind.krx.co.kr/common/disclsviewer.do?method=search&amp;acptNo=20211026000136&amp;docno=&amp;formProcsCd=070&amp;language=english" target="_blank" rel="noopener">The link to the English regulatory filing is here.</a></p><section class="figure"><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/237/523/original/1.png?1635227576" class="editor-image img-responsive" data-smartkarma-image-id="237523"></figure></section><div class="content-caption">(Source: KRX KIND)</div><p>The #191 perpetual convertible bonds were exclusively issued to KOBC in March 2017. The conversion price is ₩7,173, and if KOBC converts all of them, it will obtain 83,647,009 ordinary shares, causing a share dilution of 16.4%.</p><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/237/524/original/image?1635227656" class="editor-image img-responsive" data-smartkarma-image-id="237524"></figure><div class="content-caption">(Source: DART)</div><div class="content-highlight"><p><strong>However, there is a catch here. Suppose the KOBC exercises the right to claim conversion before the scheduled repayment date. In that case, the CB will be converted to HMM's new stock, regardless of HMM's decision to exercise its right to claim for early redemption.</strong></p></div><p>Yes, the KOBC reserves the right to convert this CB into HMM stocks at ₩7,173 per share at any time. It is still a quarter of HMM's current share price. The market profit obtained by converting CB into stock alone amounts to about 1.86 trillion won.</p>

In a regulatory filing, HMM said it had decided to repay 600 billion won worth of permanent CB (#191 owned by KOBC: Korea Ocean Business Corporation) in advance. That is, HMM will exercise its right to claim for early redemption. If the CB holder (KOBC) agrees, HMM will make the CB repayment on December 9.The link to the English regulatory filing is here.(Source: KRX KIND)The #191 perpetual convertible bonds were exclusively issued to KOBC in March 2017. The conversion price is ₩7,173, and if KOBC converts all of them, it will obtain 83,647,009 ordinary shares, causing a share dilution of 16.4%.(Source: DART)However, there is a catch here. Suppose the KOBC exercises the right to claim conversion before the scheduled repayment date. In that case, the CB will be converted to HMM's new stock, regardless of HMM's decision to exercise its right to claim for early redemption.Yes, the KOBC reserves the right to convert this CB into HMM stocks at ₩7,173 per share at any time. It is still a quarter of HMM's current share price. The market profit obtained by converting CB into stock alone amounts to about 1.86 trillion won.

HMM Perpetual Bond Conversion Situation Update for Short Position

HMM Co., Ltd.

HMM Perpetual Bond Conversion Situation Update for Short Position