Excerpt from musicbusinessworldwide.com

K-pop giant HYBE is being forced to make an early repayment on KRW 400 billion (USD $293 million) in debt, and the company will be issuing new bonds to cover the amount.

According to a report at South Korea’s Maeil Business News on October 10, investors who own KRW 400 billion-worth of HYBE convertible bonds issued in 2021 have opted for early repayment, forcing HYBE to come up with the cash by November 5.

The bonds – the third series of convertible bonds issued by HYBE – carry a 0% interest rate, but have the option to convert the bonds, upon maturity, to HYBE stock at a price of KRW 385,000 ($282.50) per share.

To turn a profit on the bonds, HYBE’s share price would have to be higher than that level when the bonds matured. However, the K-pop giant’s stock price has been steadily declining for the past year-and-a-half, and closed on Wednesday (October 15) at KRW 179,500 ($131.75).

Nearly all (99.95%) of bondholders of the third series have requested early redemption, Maeil reported, citing data from the Korean Securities Depository.

At a recent internal company town hall, newly-appointed HYBE CEO Jaesang Lee sought to quell concerns about the company’s financial state. According to a report at allkpop.com, Lee reportedly told staff that the company has “KRW 1.2 trillion (approx. $880 million) in available cash assets, and our financial condition is very healthy.”

HYBE’s latest semi-annual report shows that, as of June 30, 2024, the company had KRW 321.45 billion ($235.8 million) in cash and cash equivalents, plus KRW 753.1 billion ($552.4 million) in other liquid assets, for a total of KRW 1.075 billion ($788.2 million).  The company also reported KRW 714.22 billion ($523.8 million) in current liabilities.

Read the full article on Music Business Worldwide