[Disclosure] Jeju Semiconductor (080220) to Sell KRW 9.48B of Treasury Shares via Block Deal for Working Capital

Source Fact: Financial Supervisory Service DART / 2024-02-21

Disclosure Type: Report on Major Company Matters (Decision on Disposal of Treasury Shares)

💡 3-Second Summary

Jeju Semiconductor has decided to liquidate 330,000 shares of its treasury stock via a pre-market block deal, securing approximately KRW 9.48 billion in cash. The proceeds will be utilized as operating capital, specifically for purchasing raw materials needed for semiconductor chip production.

📊 1. [Key Disclosure Content & Major Figures Summary]

• Shares to be Disposed: 330,000 common shares (Approx. 0.96% of the 34,442,833 total outstanding shares)
• Disposal Price per Share: KRW 28,750 (Calculated by applying a 4.8% discount rate to the previous day’s closing price of KRW 30,200)
• Estimated Total Proceeds: KRW 9,487,500,000 (Subject to slight changes depending on the final market close on the transaction eve)
• Execution Date: February 22, 2024 (Executed via pre-market after-hours bulk transaction / Block Deal)
• Purpose of Disposal: Securing working capital for raw material procurement
• Treasury Shares Status Post-Disposal: Remaining treasury shares will decrease from 1,089,729 shares (3.27%) to approximately 759,729 shares (approx. 2.21%).

📈 2. [Expert Insight: Impact Analysis on Stock Price]

• Financial Fundamental Evaluation: Securing KRW 9.5 billion in liquid cash by utilizing treasury stock enhances financial flexibility. Since the capital is raised through existing corporate assets rather than issuing corporate bonds or conducting a shareholder-allocated rights offering, direct equity dilution for existing shareholders is minimized.
• Short/Long-term Stock Outlook: By opting for a pre-market block deal rather than selling directly into the open market, the company effectively minimized immediate intra-day overhang risks. However, since the transaction is executed at a 4.8% discount, it might trigger a temporary conservative sentiment as retail investors question the urgency of working capital. While it may cap short-term upside momentum, if this cash successfully finances timely raw material acquisition to capitalize on the semiconductor cycle recovery, it will ultimately serve as a fundamentally sound decision in the long run.

📝 Editor’s Comment (by K-STOCK Editor)

A company selling its own shares usually implies two scenarios: either management believes the stock is fully valued, or they are in immediate need of cash. Jeju Semiconductor’s case leans toward the latter. Fortunately, they mitigated the worst-case scenario by executing a block deal with a 4.8% discount rather than dumping shares directly onto the trading floor, shielding retail investors from immediate market impact. While using treasury stock is a structurally cleaner funding mechanism than a capital raise, investors must carefully cross-reference upcoming quarterly utilization rates and inventory metrics to verify that this raw material funding translates into high-margin revenue growth.

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