pharm edaily

[Lim Jeong-yeo, Edaily Reporter] BL Pharmtech stocks hit ceiling for third consecutive day on Friday, riding on surging expectation of sales increase from its subsidiary firm, Anyone Fnc. Solux stocks partially rebounded upon a regulatory filing confirming its plans to merge with Aribio is still in progress.

Kosdaq stock list, Feb. 28(Photo=MP Doctor)

BL Pharmtech shows performance confidence

BL Pharmtech, which operates in the health supplement and diagnostic kit sectors, closed at 2440 won on Friday, up 29.93% from the previous day. The rally followed the company’s recent bonus issue in February, which gave out two stocks per each stock previous owned.

This decision comes merely four months after the company implemented a 10-to-1 reverse stock split in Oct. 2023. The swift shift from drastically reducing shares to increasing them reflects an improved business outlook, the company said.

At the time of the reverse stock split, BL Pharmtech was facing financial difficulties. Typically, a reverse stock split is a tactic implemented to offset accumulated losses by reducing capital, often at the cost of shareholders losing stock proportional to the reduction ratio. In 2023, BL Pharmtech’s revenue fell 64% year-over-year to 8.8 billion won, with an operating loss of 3.1 billion won and a net loss of 4 billion won.

The company announced a capital reduction on Oct. 18 to improve its financial structure and obtained necessary shareholder approval on Nov. 29. Trading was suspended between Dec. 13 and Jan. 6, resuming on Jan. 7 with the number of shares slashed from 88.97 million to 8.89 million. Not too long after in February, BL Pharmtech announced a bonus issue, bumping up the number of shares to 26.68 million.

According to a BL Pharmtech representative, “BL Pharmtech holds a 36% stake in Anyone FNC, whose ramen brand ‘Mr. Min’ was withdrawn from French retailer Carrefour last year, leading to a business setback and prompting the capital reduction. However, the brand has since entered Morrisons in the U.K., and just days ago, gained reentry to Carrefour. With expectations of strong ramen sales, we decided to issue a stock dividend to increase capital and improve stock liquidity, reflecting our confidence in business normalization.”

Regarding financial stability, the representative added, “While our Q3 report showed a remaining cash balance of only 600 million won, since then we have recovered 3.1 billion won from real estate-backed securities in Dec. 2024. We are also in the process of auctioning unlisted stock-backed securities and expect an additional 3 billion won recovery in March. Additionally, we hold a 6.6% stake in MOAlifeplus(formerly BL), which is being considered for a block-deal valued at 6 billion won. That remains a possibility, but as our current and expected recoveries are sufficient for operations, we are holding off on the sale.”

The company also plans to raise funds to expand its ramen business. “To aggressively push the ramen business, we are considering funding through convertible bonds and third-party share allotments, particularly with distribution companies interested in investment. The U.S.’s higher trade barriers under the Trump administration have also increased interest in the European market,” the representative said.

BL Pharmtech announced plans to acquire Anyone FNC in July 2023 for 9 billion won, with the final payment scheduled for April 1. Upon completion, Anyone FNC will be included as a consolidated subsidiary in BL Pharmtech’s financial statements.

Solux rebounds as Aribio merger remains on track

Solux’s stock surged 29.94% to close at 3190won on Friday, buoyed by reassurance that its planned merger with Aribio is still on course.

Solux had recently suffered two consecutive lower-limit declines, with its stock plunging from 6000 won to 2000 won range. The primary cause was the sharp decline in the stake held by its largest shareholder, CEO Jung Jae-joon. Jung’s stake in the company fell from 38.86% to 11.08% due to forced sales triggered by creditor actions.

Jung was forced to sell shares in the open market to meet debt obligations, leading to a further decline in stock prices. Investor anxiety also grew after the company’s securities registration statement for the merger with Aribio was amended seven times, with the most recent request for revisions from the regulatory body still unfulfilled after Dec. 30.

The investor sentiments improved after Feb. 27, after Solux filed a regulatory disclosure stating that it plans to finalize its shareholder list in April and complete the merger by Aug. 9. The company also announced plans to submit the revised securities registration statement by March, reassuring investors and prompting a modest recovery in stock price.

Solux stated in a recent shareholder letter, “The recent dip in stocks was caused by the forced sale of shares by creditors due to a collateral loan agreement involving our major shareholder. We do not anticipate further forced sales.”

The company further clarified that the CEO’s collateral-based loan was not for personal use but was necessary to fund Aribio’s clinical trials and facilitate the merger process.

A person in intelligence on the matter said, “Although the merger timeline has been delayed, we are maintaining smooth communication with regulatory authorities and are working diligently to finalize the revised securities registration statement.”