Orion disclosed on the 26th that it will make an additional investment of 125 billion won in LegaChem Biosciences through an overseas subsidiary.
The investment will be channelled through PAN ORION (in which Orion holds a 95.2% stake), which will participate in both a third-party allotment rights offering and a private placement of convertible bonds (CBs) by LegaChem Biosciences. The total investment of 125 billion won comprises 82.5 billion won in convertible preference shares and 42.5 billion won in convertible bonds.
Through the rights offering, PAN ORION will acquire 552,578 convertible preference shares. Following completion, PAN ORION's total shareholding will stand at 9,915,861 shares, representing a stake of 25.28%.
In aggregate, LegaChem Biosciences is raising 500 billion won through this round — 330 billion won via the rights offering and 170 billion won via CBs. The proceeds are earmarked for research and development operating costs relating to antibody-drug conjugates (ADCs) and immuno-oncology therapies. The Korea Development Bank's Advanced Strategic Industries Fund and a third-party financial investor are also participating in the transaction.
Hanwha Investment & Securities characterised the core rationale of the investment as stake defence and the preservation of a key growth pillar, noting that Orion's participation on a pro-rata basis is structured to maintain its existing ownership level in the face of external capital inflows.
The shares issued under the rights offering are subject to a one-year lock-up, while the CBs become convertible from July 2028, meaning the immediate overhang risk is limited.
Hanwha Investment & Securities maintained its Buy recommendation on Orion with a target price of 180,000 won. The current share price, as of 25th June, stands at 124,800 won.