NH Investment & Securities (005940.KS) will join the ranks of brokerages with equity capital exceeding 10 trillion won through a 400 billion won rights issue.
According to the Financial Supervisory Service's electronic disclosure system on Wednesday, NH Investment & Securities held a board meeting and resolved a 400 billion won third-party allotment rights issue targeting its largest shareholder, NH NongHyup Financial Group. The move comes about 10 months after the brokerage raised 650 billion won through the same method from NH NongHyup Financial Group last August.
Once the rights issue is completed, NH Investment & Securities' equity capital will surpass 10 trillion won. As of the end of the first quarter this year, the brokerage's equity capital on a consolidated basis stood at 9.965 trillion won. Currently, only two domestic brokerages — Korea Investment & Securities and Mirae Asset Securities — have equity capital exceeding 10 trillion won. The payment date for the rights issue is set for the 29th of this month.
"This rights issue is a strategic decision that goes beyond short-term capital expansion to secure competitiveness in future growth businesses," NH Investment & Securities CEO Yoon Byung-woon said. "We will do our best to efficiently utilize the secured capital to enhance profitability and corporate value, leading to improved shareholder value."
NH NongHyup Financial Group will participate in the rights issue at the reference share price without applying any separate discount rate. The arrangement is seen as preemptively addressing concerns over shareholder value dilution.
NH Investment & Securities explained that the rights issue is intended to build a stable capital environment so that its Integrated Management Account (IMA) business and related corporate finance and venture capital investments can move onto a growth track. Since the IMA business requires significantly higher capital capacity and financial soundness than existing operations, the company plans to strengthen its business capabilities through swift capital support at the holding company level. NH Investment & Securities had previously launched two IMA products worth 400 billion won and 120 billion won, respectively, both of which sold out.
A portion of the raised funds will also be used to expand retail credit lending limits. While investor demand for credit lending has been rising rapidly amid the recent stock market boom, services have been repeatedly suspended due to limit constraints linked to equity capital.
