South Korea's largest cathode active material maker EcoPro BM Co. (247540.KQ) disclosed a KRW 1.2 trillion (approximately USD 865 million) rights offering on June 30, 2026, to finance a strategic stake increase in an Indonesian nickel smelter. The announcement sent shares tumbling more than 19% in after-hours trading on dilution concerns.
Part A — The News
EcoPro BM plans to issue 9,900,990 new ordinary shares — equal to 10.1% of its existing 97.8 million share base — at a preliminary price of KRW 121,200 per share, a 20% discount to the reference price. The final issue price will be determined on October 12, 2026. Existing shareholders on record as of September 4 will be eligible to subscribe during the October 15–16 window, with new shares expected to list on November 5.
The stock fell 7.77% during the regular session before the announcement, and extended losses to 19.03%, settling near KRW 125,100 in after-hours trading as of 5:34 p.m. on June 30. Parent company EcoPro Corp. also shed more than 18% in after-market deals.
Part B — What the Proceeds Are For
The lion's share of the capital — KRW 765 billion — will fund the acquisition of an expanded stake in PT BNSI, a nickel ferroalloy smelter located in the Sulawesi region of Indonesia. Once completed, EcoPro Corp. and EcoPro BM together will hold a combined 39% stake in BNSI, while EcoPro Corp. alone will secure supply rights of 65,000 metric tons of nickel per year. BNSI's annual production capacity will expand from 66,000 to 90,000 metric tons.
Additional proceeds are allocated as follows:
| Use of Proceeds | Amount (KRW) |
|---|---|
| Indonesia BNSI stake (BNSI nickel smelter, Sulawesi) | 765 billion |
| Hungary factory operations | 150 billion |
| Domestic cathode production facilities | 150 billion |
| Raw material procurement (working capital) | 135 billion |
| Total | 1.2 trillion |
EcoPro Corp., which holds a 40.83% stake in EcoPro BM, plans to subscribe to 4,366,131 new shares for approximately KRW 529.2 billion, lifting its stake marginally to 41.13% after the offering. The four-bank underwriting consortium — Korea Investment & Securities, NH Investment & Securities, Mirae Asset Securities, and Daeshin Securities — will manage the transaction.
Why This Matters
The rights issue is EcoPro's most explicit move yet toward vertical integration of the nickel supply chain, a critical input for nickel-manganese-cobalt (NMC) cathode materials that power EV batteries. South Korea's battery material sector has faced margin pressure from slower EV uptake in key export markets, and securing upstream mineral rights at scale is seen as essential to long-term cost competitiveness.
EcoPro BM supplies cathode materials to Samsung SDI (006400.KS) and SK On, among others. Locking in BNSI's nickel output at an internal transfer price reduces exposure to spot market swings — nickel on the London Metal Exchange has been volatile since the 2022 short squeeze and subsequent glut from Indonesian processing capacity.
The trade-off is near-term dilution: the 10% share count increase and 20% discount pricing weigh directly on EPS and book value. The share price reaction suggests investors remain skeptical that the Indonesia integration premium justifies an immediate 10% haircut on their holdings. Whether the capital allocation proves value-accretive will hinge on BNSI's ramp-up timeline and cathode demand recovery through 2027–2028.
Sources: Chosun Biz · Hankyung
