이 기사는 2022년 03월 10일 08:08 thebell 에 표출된 기사입니다.

South Korea’s NH Investment & Securities plans to secure additional liquidity through a bond issuance while it will raise 400 billion won ($324 million) from its parent Nonghyup Financial Group through a separate stock sale.

NH Investment & Securities’ board approved a capital increase of 400 billion last week. The brokerage firm will issue some 34.63 million new shares at 11,550 won per share on Thursday. New shares will be listed on March 25.

All of the new shares will be acquired by Nonghyup Financial Group. The decision comes six months after the holding company injected 200 billion won into its brokerage unit in October 2021. If the 400 billion won capital hike is completed, Nonghyup Financial Group’s stake in NH Investment & Securities will increase to about 54% from 49.1% at the end of September 2021.

NH Investment & Securities had equity capital of 6.82 trillion won at the end of 2021, which will grow to 7.22 trillion won after the planned capital increase. The brokerage firm is expected to remain one of the big three securities firms in Korea alongside Mirae Asset Securities and Korea Investment & Securities in terms of equity capital. The two firms had equity capital of 10.61 trillion won and 7.15 trillion won respectively as of the end of last year.

NH Investment & Securities CEO Jeong Young-chae is expected to get a boost from the parent company’s series of financial support. The brokerage firm’s nomination committee nominated incumbent CEO Jeong as sole candidate to spearhead the brokerage firm earlier this month. Jeong will be officially appointed to serve a third consecutive term as CEO after approval at the shareholders’ meeting slated for March 23, becoming the first to do so at the firm.

“The holding company had already talked about providing 600 billion won, and in response, it injected 200 billion won in October last year,” an official at NH Investment & Securities said. “The remaining 400 billion won will be provided this time.”

NH Investment & Securities’ capital increase plan has prompted speculation that the firm has replaced its planned bond issuance with the rights offering.

Yet, the brokerage firm plans to continue reviewing its bond issuance plan. It is currently in talks with sale managers Mirae Asset Securities and Samsung Securities to set a strategy and timeline.

NH Investment & Securities and sale managers had planned to conduct bookbuilding process on February 22 to raise 250 billion won in 3-year bonds, 70 billion won in 5-year bonds and 30 billion won in 7-year bonds. They, however, decided to postpone the process amid unstable corporate bond market conditions.

Market insiders expect the brokerage firm to resume its bookbuilding process in mid-March after Wednesday's presidential election.

NH Investment & Securities’ strong financial performance is expected to attract many institutional investors to its bond issuance. The brokerage firm recorded revenue of 10.76 trillion won in 2021 with an operating profit of 1.32 trillion won and a net profit of 948 billion won. (Reporting by Chul Kang)