Ace Technologies saw a surge in its stock prices despite issuing convertible bonds thanks to market expectations that it will perform well in the second half of the year thanks to its supply deal with Ericsson.
The company’s closing price on Wednesday was an increase from 0.91% from a day earlier. A spokesperson for the firm said this was due to high expectations for its performance going forward despite exiting shareholders seeing their shares diluted.
Ace announced last week on Friday that it was issuing convertible bonds and proceeded with the plan on Tuesday this week. It issued 35 billion won worth of bonds __ it said 25.8 billion won will be used to pay back debts and 9.2 billion won spent on operational fees.
Its stock price as of Wednesday after the bell stands at 8,830 won, higher than the 8,810 won of Thursday last week, a day before the announcement for the issuance.
The company was chosen as a supplier for radio systems to Swedish network giant Ericsson late last year. While it posted an operating loss of 14.1 billion won in the first quarter, the company is expected to recover in the second quarter while it will see substantial sales growth afterwards from this deal, the spokesperson said.
KMW, its main local rival in radio equipment, saw a similar sales rise from its supply deal to Finnish network giant Nokia last year.
As of Thursday last week, Ace Technologies CEO Koo Gwanyoung was the single largest shareholder of the company with 7.49%. The combined share with his family members was 16.47%. Adding the shares of two companies that Koo also controlled increases this further to 27.02%.
The issuance of bond would have done little to dent the control Koo has over this company, people familiar with the matter told TheElec.