Daishin Securities to Issue Additional 50 Billion Won in RCPS for IB Expansion

Daishin Securities (003540.KS) is accelerating its capital expansion through consecutive large-scale issuances of redeemable convertible preferred shares (RCPS) to strengthen its investment banking (IB) business and secure operating funds. Following the 335 billion won raised on November 20, the company has now decided to issue an additional 50 billion won in RCPS, finalizing a funding plan of nearly 400 billion won in approximately two weeks.

Daishin Securities announced through a Financial Supervisory Service electronic disclosure on Sunday that it has decided to issue 594,530 RCPS shares worth approximately 50 billion won ($37 million). The issuance price is 84,100 won per share, with the payment date set for January 16. This paid-in capital increase will be conducted through third-party allocation to Neumale 12th Investment Corporation. The new shares will be subject to a one-year lock-up period. The raised funds will be used entirely as operating capital to expand corporate credit extension investments.

The RCPS being issued carry voting rights identical to common shares, and the company can exercise redemption rights starting December 17, 2028, three years after issuance. Conversion requests become available from June 17, 2029, at a 1:1 conversion ratio. The dividend structure is designed as non-participating cumulative preferred dividends, with a preferred dividend rate of 5.35% annually for the first three years, increasing by 1.5 percentage points each year thereafter. This structure, where preferred dividend obligations gradually increase during rising interest rate periods, is interpreted as being linked to Daishin Securities' long-term financial strategy.

Previously, Daishin Securities disclosed a total RCPS issuance of 335 billion won on November 20. At that time, the company decided to issue a total of 4,135,796 RCPS shares through three third-party allocation capital increases of approximately 177 billion won, 112 billion won, and 46 billion won respectively.

Daishin Securities stated at the time that the purpose of the capital increase was to "strengthen the IB business through expanded corporate finance limits." This additional funding is also viewed as an extension of efforts to widen the scope of its IB division. As equity capital capacity is essential for actively expanding corporate finance assets in an environment of high interest rate volatility, the company is interpreted to be continuing preemptive capital expansion through RCPS.

RCPS is considered a preferred capital raising method in the securities industry recently because it can be converted to common shares when necessary while relatively minimizing dilution of existing shareholders' stakes. Market analysts note that "as Daishin Securities has clearly demonstrated its commitment to IB business expansion through consecutive RCPS issuances, aggressive moves in corporate credit extension and investment finance areas are expected to continue."