Kakao Corp.

04/24/2024 | Press release | Distributed by Public on 04/24/2024 02:14

Decision on Issuance of Exchangeable Bonds

Decision on Issuance of Exchangeable Bonds
1. Type of bonds Series No. 13 Type Foreign currency denominated unguaranteed senior exchangeable bonds
2. Total face value of bonds (or electronically registered bonds) (KRW) 285,039,000,000
2-1 (Overseas issuance of convertible bonds) Total face value of bonds (or electronically registered bonds) (currency unit) 205,804,332 USD : US Dollar
Basic exchange rate, etc. 1385.00
Region of issuance Overseas financial market such as Singapore, etc.
Name of exchange (if overseas listing) Singapore Exchange Limited(SGX)
3. Purpose of financing Facility investment (KRW) 100,000,000,000
Business acquisition (KRW) 0
Operating capital (KRW) 0
Debt repayment (KRW) -
Acquisition of securities issued by other corporations (KRW) 185,039,000,000
Other purposes (KRW) -
4. Interest rate Coupon rate (%) 2.5
Yield to maturity (%) 2.5
5. Maturity date of bonds 2029-04-29
6. Method of interest payment Interest payments occur every six months starting from the date of issuance
7. Method of principal repayment 1. Redemption at maturity
The issuer will redeem the full principal amount of this bond in cash at maturity, unless they are swapped with the company's treasury stocks, redeemed, purchased, or retired before the maturity date.

2. Early redemption
Issuing company holds the right to exercise early redemption(call option) and bondholders hold the rights to claim early redemption(put option)
8. Method of bond issuance Private offering
9. Details of exchange Exchange ratio (%) 100
Exchange price (KRW/share) 61,965
Calculation of exchange price The initial exchange price is planned to be determined within the range of 125% to 130% of the closing price of the Company's common shares on the Korea Exchange securities market on April 22, 2024, taking into account the exchange premium.
Object of exchange Class of shares Registered common stocks (treasury stocks) issued by the company
Number of shares 4,600,000
Ratio to total number of shares (%) 1.0
Exchange period Start date 2024-06-09
End date 2029-04-19
Details on exchange price adjustment The bond's issuance conditions will reflect the reasons for the adjusting exchange value under the normal conditions in the practice of issuing overseas exchange bonds (capital increase without consideration, stock split/merger, change in stock classes, stock/cash dividends, options for shareholders, warrant other rights granted, issuance of new shares below market price, issuance of stock-linked securities, etc.), and the exchange price of this bond may be adjusted according to the reasons for the adjustment of the exchange value.
9-1. Details of option A. Issuer's call option
(i) If the closing price of the common stock exceeds 130% of the exchange price for 20 out of 30 consecutive trading days during the period starting from 3 years and 14 days from the bond issuance date to 30 trading days before the maturity date.
(ii) If the outstanding principal amount of the bond is less than 10% of the principal amount at the time of issuance
(iii) If the company is obliged to withhold taxes on bond payments under the changed tax-related laws or interpretation thereof and, therefore, obliged to pay an additional amount equal to the withheld amount.

B. Bondholders' put option
(i) If there is a change of control in the company
(ii) If the company is delisted from the Korea Exchange's stock market or trading is suspended for more than 30 consecutive trading days
(iii) Three years from the date of bond issuance
10. Date of subscription 2024-04-22
11. Date of payment 2024-04-29
12. Lead underwriter UBS AG Hong Kong Branch
13. Guarantor -
14. Date of board resolution (decision date) 2024-04-22
- Attendance of outside directors Present(No.) 5
Absent(No.) -
- Attendance of auditors (members of Audit Committee) Present
15. Subject to filing of securities registration statement? No
16. Reasons for exemption from filing securities registration statement, if exempted - Subject to submission: Exempted
- Reasons for exemption: Residents are prohibited from acquiring the securities within one year from the issuance date under Article 2-2-2(2)5 of the Regulations on the Issuance and Disclosure of Securities
17. Details of securities lending & borrowing related to overseas issuance of bonds - purpose, number of securities, information of lenders & borrowers, scheduled date of disposal, terms of lending & borrowing (lending period, terms of repayment, interest), repayment method, linkage to issuance of the concerned EBs, fees, etc. -
18. Subject to reporting to the Fair Trade Commision? No
19. Other matters to be factored into investment decisions A. "2. Total face value of bonds (KRW)", "4. Interest Rate," "5. Maturity Date of Bonds," and "9. Details of Exchange-Exchange Price(KRW/Shrare), Calculation method of Exchange Price, Exchange Target of No. of Shares and Ratio to Total No. of Shares(%), Period of Exchangeable Bond, "10. Date of Subscription," and "11. Date for Payment" above will be determined through recruitment of investors after the resolution of the board of directors, and the amount, schedule, and other figures are expected. When the terms of issuance of the bonds are confirmed, the company plans to make a correction disclosure.

B. The "2. Total Face value of Bonds(KRW)" above will be determined within the limit of USD 300,000,000 based on the number of treasury stocks subject to exchange and the exchange price. The "KRW" above was converted using the "2-1 standard exchange rate" (1,385.0 KRW/USD based on the notification from Seoul Exchange Brokerage on April 22, 2024) and the closing price of the trading day before the resolution date of the board of directors.

C. The coupon rate and the yield to maturity in "4. Interest rate" above are expected to be in the range of 2.25% to 2.75% per year, and will be determined through the recruitment of investors after the resolution of the board of directors.

D. "The number of shares to be issued by exchange" in "9. Details of exchange" above is the maximum number of shares, and the exchange price described above is 127.5%, the average value of 125% to 130% compared to the closing price of the previous day(April 19, 2024) on the date of board resolution.

* Exercise of the exchange right
(1) Exercise period : From the 41st day(including June 9, 2024) of issuance(payment date) of the bond to the 10th day before the maturity date(April 19, 2029)

(2) Adjustment of exchange value: When the reasons(capital increase without consideration, stock split/merger, change in stock classes, stock/cash dividends, options for shareholders, warrant other rights granted, issuance of new shares below market price, issuance of stock-linked securities, etc.) for adjustment of the exchange value stipulated in the issuance conditions of the bond occur, the exchange value of the bond shall be adjusted as prescribed in the above issuance conditions (if the adjustment amount of the exchange value is less than 1% of the existing exchange value, the exchange value shall not be adjusted and carried over to the next reason for adjustment).

E. "10. Date of Subscription" and "11. Date for Payment" are expected as follows, and the company plans to make a correction disclosure when the issuance conditions of this bond are confirmed.
- Subscription date: Tentatively, April 22, 2024 or April 23, 2024
- Payment Date: Tentatively, April 29, 2024 or April 30, 2024

F. The purpose of financing is for operating capital and the acquisition of securities of other corporations. This financing purpose is a plan as of the date of the resolution of the board of directors, and the details may change depending on the market environment and the company's management policy in the future.

G. Under the terms of issuance of this bond, it is prohibited for a resident to acquire this bond under the provisions of the Foreign Exchange Transactions Act for one year from the date of issuance.

H. The company continuously explores opportunities, such as M&A, JV establishment, etc. to strengthen Kakao's platform, AI, and content. Further details will be disclosed under the regulations.
[Details of Issuance to Designated Purchasers]
Name Relationship to company or the largest shareholder Total face value of bonds (or electronically registered bonds) (KRW)
- - -
[Intended Use of Funds]
【In the case of operating capital and other funds】(Unit : KRW)
Purpose of use of funds Details Scheduled amount to be used by per year
Year '24 Year '25 - Total
Operating Capital Investment including purchase of AI and service-related GPU and servers 50,000 50,000 - 100,000
【In the case of acquisition fund of securities of other corporations · acquisition fund of business】
Purpose of use of funds Counterparty Securities issuing company Business details of securities issuing company(Key details of acquired business) Acquisition priceBasis for calculation
Acquisition fund of securities of other corporations - - - -
The contents of this English disclosure have been prepared solely by the relevant
listed company and has not been reviewed, audited or examined by KRX. The English disclosure is being provided for reference purposes only to assist foreign investors in their investment decisions relating to such listed company's listed securities. In the event of any discrepancy or difference between the contents of the Korean disclosure and those of the English disclosure, the Korean version shall prevail. It is, therefore, imperative that you review the original Korean disclosure available on KIND (https://kind.krx.co.kr) before making any investment decision.