Enchem Removes Put Option on 14th CBs, to Repay 75 Billion Won in Installments

[Financial News] Enchem will eliminate the early redemption right on its 14th convertible bonds (CBs) and spread repayments through 2029. The company aims to reduce the risk of a sudden concentration of redemption requests and channel funds into improving profitability in its electrolyte business.
According to Enchem on the 27th, a proposal to change the bond terms was approved at the 14th CB bondholders' meeting held that day at the Korea Federation of Teachers' Associations Hall in Seoul. The company will now proceed with follow-up steps, including court approval.
The key change is the removal of the early redemption right, or put option. Instead, Enchem will provide collateral to bondholders and restructure the CBs so that the company buys back and cancels them in set amounts.
Enchem plans to buy back and cancel CBs worth a total of 75 billion won, or 25 billion won a year over the next three years, before purchasing the remaining amount in full in 2029. This lowers the chance that redemption demands will pile up at a single point in time and makes funding needs more predictable.
The investment banking industry is paying attention to the fact that this move shifts the CB repayment structure from a lump-sum risk to a phased settlement plan, rather than simply extending the maturity. It should ease short-term liquidity pressure, but the key challenge will be securing funds for the scheduled annual CB buybacks.
An official in the investment banking industry said, "Removing the put option has significantly pushed back short-term liquidity pressure, which is the core of this adjustment," adding, "But the real issue will be how steadily the company can secure funds for the planned CB buybacks over the next three years through operating cash flow and other sources."
Meanwhile, Enchem has recently placed greater emphasis on profitability and cash flow management rather than expansion alone. The company is improving operating efficiency and its cost structure at global production sites while also pushing ahead with expansion in North America.
In the United States, Enchem is pursuing a reverse triangular merger between its local subsidiary, Enchem America, Inc., and NASDAQ-listed The GrowHub Limited Class A Ordinary Shares, known as GrowHub, to secure a foundation for local fundraising and investment.
An Enchem official said, "This change in terms has eased short-term repayment pressure and secured a more stable foundation for business operations," adding, "We will strengthen our financial structure and cash flow management and turn the competitiveness of our global electrolyte business into profitability."

[email protected] Kim Kyung-a Reporter