UTI has signaled a shift toward substantial revenue growth as it begins supplying UTG (Ultra-Thin Glass) cover windows for foldable smartphones destined for North American customers to Samsung Display. The company recently moved to secure funding through a rights offering (paid-in capital increase) targeting Fernando Oscar Liu, a U.S.-based private equity fund. It is also pushing to raise $10 million by year-end, aiming to simultaneously expand mass production and stabilize its financial position. In parallel, UTI is discussing investment plans with domestic investors, including strategic investors (SI) and financial investors (FI).
According to the financial investment industry on the 5th, UTI is in negotiations with Fernando for an additional capital increase. The goal is to raise a total of $10 million by year-end. Through this, the company plans to secure additional funds necessary for product mass production and preemptively prevent the potential occurrence of EOD (loss of benefit of time) related to convertible bonds (CB).
On the 29th of last month, UTI allocated 711,989 shares to Fernando through a third-party allotment rights offering. The new shares were issued at a 10% discount to the market price, at 1,860 won per share, resulting in an inflow of 1.3243 billion won to UTI. The lock-up period is one year.
This capital increase is analyzed as laying the groundwork for follow-on investment while ensuring stable control of management rights. The company also focused on implementing measures to minimize harm to shareholders. Prior to the capital increase, Park Deok-young, CEO of UTI, donated 700,000 shares to the company, which were subsequently classified as treasury stock. This appears to be a measure aimed at minimizing the dilution of share value resulting from the increase in the number of shares due to the capital increase.
Currently, UTI’s stock price is hovering around the 2,000 won mark. Having fallen to one-tenth of its 52-week high recorded a year ago, this move is interpreted as an intention to receive investments in tranches by year-end while monitoring stock price fluctuations resulting from Fernando’s capital inflow.
Following this rights offering, UTI’s shareholding structure stands at 21.09% for friendly shares held by founder Park and others (including 4.29% treasury stock), 20.94% for Corning, and 3.20% for Fernando. If Fernando proceeds with additional investment through December, the stock price at that time will likely determine whether there is a change in the largest shareholder. At current stock price levels, raising $10 million would bring Fernando’s shareholding ratio to 28%. By simple calculation, if the stock price reaches 4,000 won, Park’s camp will maintain its position as the largest shareholder, and if it exceeds 7,000 won, additional investment attraction becomes possible.
Founder Park is confident in the company’s financial normalization. It is reported that expectations for business expansion are high given that glass specialist Corning is cooperating as the second-largest shareholder, leading to increased interest from domestic companies.
Mass production based on UTG supply contracts with major North American customers has also been fully underway. According to explanations provided at the extraordinary general meeting of shareholders last month, UTI employs 400 workers and produces 10,000 units of UTG per day, shipping twice a week. Starting from mid-this month, the company plans to increase daily production to 15,000 units following consultations with North American customers.
UTI expects to reach its break-even point when factory utilization reaches 70%. Additionally, it is discussing the supply of UFG (Ultra-Thin Flexible Glass), a second-generation product, with the currently contracted North American customer. Various proposals are being exchanged, including formulating equipment investment plans and encouraging customer participation in investments. The company is evaluated as having secured revenue sources within reach based on its technological capabilities.
An official from the investment banking (IB) industry stated, "For a long time, there had been market doubts about whether actual transactions were taking place because we could not disclose them despite proceeding with POs (Purchase Orders) with North American customers at their request, but I believe this issue has now been completely resolved." The official added, "Because the company possesses technological capabilities and is systematically securing funds for mass production, it is expected that future revenue generation as well as a subsequent re-rating of the stock price will be possible."
in STOCK
