Green Resource issues ₩30B mezzanine to fund semiconductor vertical integration

What's the deal? South Korean firm Green ResourceDealroom has a profile for this one. Try Dealroom → has issued ₩30B ($21M) in mezzanine financing — ₩20B in convertible bonds (CBs) and ₩10B in bonds with warrants (BWs) — to strengthen its semiconductor business and expand into green energy.

The funds will go toward new global semiconductor projects, eco-friendly energy raw material procurement, and production capacity expansion at its subsidiary CEKDealroom has a profile for this one. Try Dealroom →. The company aims to build a vertically integrated value chain spanning ceramic parts processing, precision cleaning, coating materials, and protective coatings for semiconductor etching processes.

Why now? CEK plans to complete the acquisition of a roughly 25,800㎡ factory at Jeongok Marine Industrial Complex in Gyeonggi Province by July. The new facility will house precision cleaning and ceramic component processing equipment for semiconductor customers at home and abroad.

CEK merged with semiconductor precision cleaning firm WithLC in June last year and is now pursuing its own IPO. Green Resource's co-chief executive Lee Jong-su called the raise "an investment for the next 10 years of growth, not merely a financial exercise."

What could go wrong? Mezzanine instruments carry dilution risk for existing shareholders — though the company structured this deal to minimise that concern. Both the coupon rate and the guaranteed yield at maturity are 0%, and there is no refixing clause that would lower the conversion price if the stock falls.

The company also retains call options on 60% of the issued amount. If fully exercised, the shares convertible on the open market would be capped at 40% of the total.

The signal: Green Resource's raise underscores how Korea's semiconductor supply chain is consolidating vertically at the materials layer. Both the parent and its subsidiary CEK are classified as early-growth stage companies on Dealroom, yet the zero-coupon, no-refix structure of this ₩30B mezzanine deal suggests investors see enough near-term upside in end-to-end etching-process capabilities to accept unusually lean terms — a vote of confidence in the thesis that owning every step from ceramic machining to precision cleaning will command pricing power as chipmakers tighten supplier quality requirements.

Read more: Edaily