In today’s briefing:
- Another Block Deal Sale of Ecopro Materials
- Clarifying BRV’s Post-Block Deal Lockup Conditions Involving Ecopro Materials
- Block Deal Sale of 3.6% Shares of Enchem
- Enchem Placement- Easily Digestible but a Punt at Best
Another Block Deal Sale of Ecopro Materials
- Shares of EcoPro Materials are down 16% today to 112,300 won, due to another block deal sale of by BRV Capital in the after hours trading on 13 June.
- After the second block deal sale on 14 June, BRV’s stake declined further from 21.2% to 18.2%.
- This block deal sale at a big discount is likely to raise overhang concerns about further block deal sales by BRV Capital in the coming months/years.
Clarifying BRV’s Post-Block Deal Lockup Conditions Involving Ecopro Materials
- In Korea, the lockup period for block deals is set by the seller and underwriters, not by law, and can be adjusted if both parties agree.
- BRV obtained consent from Goldman, UBS, and KB for a second block deal after assessing that many initial buyers had sold their shares.
- Understanding this lockup structure provides key insights into predicting when the next block deal might occur.
Block Deal Sale of 3.6% Shares of Enchem
- After the market close on 14 June, it was reported that Woori PE/other investors will be selling 705,384 shares of Enchem in a block deal, representing 3.6% of outstanding shares.
- The block deal discount rate ranges from 6.9% to 8.92%, resulting in potential block deal sale price of 270,500 won to 276,500 won.
- We would not subscribe to this block deal and we are concerned about the valuations of Enchem after a sharp share price appreciation this year.
Enchem Placement- Easily Digestible but a Punt at Best
- Woori PE, NH PE and KDB Capital seek to raise around KRW195bn (US$141m) through a secondary block deal, selling 0.71m shares (3.64% of TSO) of Enchem (348370 KS).
- The deal is a small one to digest at only 1.1 days of three-month ADV.
- In this note, we will talk about the placement and run the deal through our ECM framework.
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