Gigalane on Tuesday said it will launch a capital increase of 21 billion won through share offering.
A share will be priced at 2,283 won. This is double the conversion price of its 110 billion won of convertible bonds it issued this year.
Shareholders Kepler Value Partners and Neoplux will each buy 11 billion won and 10 billion won of the issue shares. Kepler is Gigalane’s largest shareholder with a share of 31.71%. Neoplux is the second largest shareholder of Rockpal, which wholly owns Kepler Value Partners.
Gigalane has posted three consecutive years of operating loss as of 2020. But the company is expecting to return to profitability next year from its component supply to Samsung Network.
A company spokesperson said the capital increase was done to reorganize its finance. Gigalane was preparing to expand shipment of RF components next year, they said. Next year’s sales will be determined by how much the 5G industry invest but overall it will definitely be better than 2020, they added.
The company has posted 7.9 billion won in operating loss and 42.3 billion won in sales this year as of the third quarter. In 2019, it posted sales of 72.8 billion won and operating loss of 29.6 billion won. In 2018, the firm posted 124.8 billion won in sales and 2.5 billion won in operating loss.
Gigalane’s de facto largest shareholder is company senior managing director Kim Hyun-jae. He is the son of chairman Kim Jung-gon, who acquired Gigalane back in 2006. The older Kim sold his share worth 23.8 billion won to Kepler Value Partners in 2017. The younger Kim owns 44% share of Rockpal.
Ideal Partners own 16 billion won worth of convertible bonds of Gigalane. Gigalane issued bonds twice, 9 billion won in March and 7 billion won in August. The conversion price for each is 1,126 won and 1,117 won. They can be converted to shares in August next year.
Gigalane is betting on its antenna filter unit to sell well next year. South Korean analysts expects the company to post around 100 billion won in sales from them. The units are supplied to Samsung Network.
Gigalane earlier this year named Choi In-gwon as its new CEO. Choi joined Gigalane in February 2018. He had worked at Samsung Electronics between 1984 to 2014. He was previously the leader of the hardware group at Samsung Network.