EcoProBM, a subsidiary of EcoPro Group, announced on the 14th a capital raise of 1.2 trillion won through issuing 9.9 million new shares via rights offering followed by public offering of unsubscribed shares, representing 10.1% of existing Korean stocks. The capital raise aims to secure nickel resources amid intensifying competition with Chinese firms in the battery industry, with 765 billion won allocated to acquire a 39% stake in the BNSI smelter in Indonesia. Small shareholders voted 65.5% against requesting a focused review by the Financial Supervisory Service, signaling majority support for the strategic investment despite initial stock price declines of 21.7% through the 9th following the July 1 announcement.
EcoProBM Announces 1.2 Trillion Won Capital Raise
EcoProBM announced the issuance of 9.9 million new ordinary shares through a rights offering with subsequent public offering of unsubscribed shares, raising a total of 1.2 trillion won. The new shares represent 10.1% of the company's existing total issued shares.
![EcoPro Hungary Plant]()
EcoPro Hungary Plant [Source: EcoPro]
Investment Breakdown: BNSI Smelter and Hungary Operations
Of the capital raised, 765 billion won will be invested in acquiring a stake in the BNSI smelter within Indonesia's International Green Industrial Park (IGIP). An additional 150 billion won will be allocated to EcoProBM's Hungary subsidiary and local plant operations. The remaining funds will be distributed as follows: 150 billion won for facility investments and 135 billion won for operating capital.
![Indonesia BNSI Smelter Construction Site]()
Indonesia BNSI Smelter Construction Site [Source: EcoPro]
Stock Price Declines 21.7% Following Announcement
EcoProBM's stock price fell 6.88% on July 1, the day following the capital raise announcement. The stock continued declining through the 9th, recording a total drop of 21.7%. Parent company EcoPro also declined 25.5% during the same period.
Nickel Supply Secures Cost Reduction Foundation
Through this investment, EcoPro Group secured a 39% stake in the BNSI smelter, comprising 19.1% held by EcoPro and 19.9% by EcoProBM. This represents the largest ownership position, ahead of Vale Indonesia's 30%, China's GEM at 21%, and global funds at 10%. EcoPro stated that including this stake investment along with prior four-year investments, the group has secured annual nickel supply rights totaling 65,000 tons, sufficient to produce approximately 1.5 million electric vehicles.
An industry official stated that cost reduction is essential for competition with China, describing the Indonesia investment as an opportunity that cannot be missed, requiring approval from Indonesian authorities and Chinese capital partners.
Shareholders Vote Against FSS Review Request
Small shareholder platform Act conducted a vote on whether to petition the Financial Supervisory Service for a focused review of EcoPro Group's capital raise. The results showed 34.5% (9,682 shares) in favor and 65.5% (18,419 shares) against the petition.
Act stated: "We respect the collective will of shareholders as our top priority. Since a majority of shareholders have indicated that a collective petition at the platform level is unnecessary, we have decided not to proceed with filing an official collective petition under Act's name."
Act also raised concerns that the capital raise structure places the business burden of parent company EcoPro and EcoPro Materials on EcoProBM shareholders. Act explained that due to the value chain structure, EcoPro Materials (precursor company) would benefit more from the nickel smelter investment than EcoProBM (cathode company), yet the large-scale investment is being funded by EcoProBM shareholders who have greater capital mobilization capacity.
Company Commits to Risk Minimization
Kim Jang-woo, EcoProBM's management representative, stated: "We will do our best to minimize risk factors associated with participation in the nickel project and contribute to enhancing corporate value through stable operations."
FAQ
Why did EcoProBM raise 1.2 trillion won through this capital increase?
EcoProBM raised 1.2 trillion won to invest 765 billion won in acquiring a 39% stake in the BNSI smelter in Indonesia, 150 billion won for Hungary operations, 150 billion won for facility investments, and 135 billion won for operating capital. The investment aims to secure nickel resources for cost reduction amid competition with Chinese firms in the battery industry.
What was the small shareholder vote result regarding the FSS review request?
Small shareholders voted 65.5% (18,419 shares) against requesting a Financial Supervisory Service focused review of the capital raise, with 34.5% (9,682 shares) in favor. Platform Act decided not to file a collective petition based on the majority opposition.
How much nickel supply capacity did EcoPro Group secure through this investment?
EcoPro Group secured annual nickel supply rights totaling 65,000 tons through this investment combined with prior four-year investments. This quantity is sufficient to produce approximately 1.5 million electric vehicles.
