Ecopro BM will proceed with its 1.2 trillion won ($846 million) rights offering despite a correction request from the financial regulator, filing a revised prospectus that provides greater detail on how it plans to use the proceeds while keeping the offering size and terms unchanged.
According to DART, the Financial Supervisory Service's electronic disclosure system, Ecopro BM submitted a voluntary amended registration statement for the 1.2 trillion won offering on Thursday.
The company announced the rights offering — structured as a shareholder allocation with a public offering for unsubscribed shares — on June 30. The FSS issued a correction request on July 14, and Ecopro BM filed its first amended statement on July 24. This latest revision is a voluntary submission ahead of any further formal FSS ruling.
The core of the amendment is not a change in the offering size but a more detailed explanation of how the funds will be used. Ecopro BM provided an in-depth account of its planned investment in the BNSI nickel smelter in Indonesia, one of the primary destinations for the proceeds.
Construction of the BNSI smelter was 39.2 percent complete as of late last month. The company said major groundwork has been finished and that trial operations of key facilities and equipment are expected to begin in December. The remaining construction work is scheduled for completion in March next year.
The issuance terms, which directly affect the dilution burden on existing shareholders, were left untouched. The number of new shares to be issued remains 9,909,900, with a planned issue price of 121,200 won per share.
Ecopro BM has moved forward with its large-scale capital raise on the original schedule while strengthening its explanation of fund usage in response to the FSS request. The company focused particularly on clarifying the destination of the proceeds by laying out the current progress and future timeline of its overseas nickel smelter investment.
The risk of shareholder value dilution from the offering remains, however. Existing shareholders who do not receive new share allocations could see their proportional stake in total issued shares decline. The share price outlook will depend on factors including the gap between the offering price and the market price, the scale of dilution from the new issuance, and whether the Indonesia smelter investment translates into actual improvements in profitability.
The amended registration statement takes effect Aug. 25. Ecopro BM plans to hold a second general shareholder briefing on Aug. 21 to explain the details of the rights offering.
kacew@heraldcorp.com
