Knowmerce raises ₩40B in convertible bonds to fund global push

What's the deal? KnowmerceDealroom has a profile for this one. Try Dealroom →, a South Korean artist intellectual property (IP) solutions company, has raised roughly 40 billion won (about $27 million) from institutional investors through a convertible bond issue, it said on July 24. The company framed the raise as pre-emptive growth investment for global expansion rather than a top-up of working capital.

Why now? Knowmerce already holds about 20 billion won in cash and cash-equivalent assets, giving it financial stability before the raise. With the additional funds, it plans to accelerate its overseas rollout.

The terms: The bonds carry a 0% coupon and 0% maturity rate, with a conversion price of 15,520 won — a 40% premium to the reference share price. There is no refixing clause to lower that price if the stock falls, and the company can exercise a call option on up to 55% of the issue, limiting dilution and overhang for existing shareholders.

What's the endgame? Knowmerce said the issuer-friendly structure is rare among recent listed-company financings and reflects investor confidence in its long-term growth and valuation. It attributed investor interest to its global strategy, IP-based platform, and expansion potential.

A company representative said the raise "is not a response to a financial crisis but a pre-emptive growth investment for global business expansion," adding that subscriptions closed "in about a week" after the favourable terms were set. The proceeds will go toward IP acquisition, concerts, merchandise, and content.

The signal: A no-refixing, above-market convertible signals a company negotiating from strength — and a market that increasingly views Knowmerce's shares as undervalued against its growth prospects.

Read more: Edaily