2023-10-07 00:00:00
Winia defaults on maturity notes worth 3.6 billion won
Winia Electronics and Daeyu Plus apply for corporate rehabilitation
Financing conditions worsened due to credit rating downgrade
Winia’s new 2024 Dimchae product. Photo provided by Winia
As Winia (071460), known as ‘Dimchae’, enters corporate rehabilitation procedures, concerns are growing that the Dayou Winia Group may go bankrupt. Currently, two out of five listed companies in the Dayou Winia Group have already been suspended from trading, and the stock price volatility of the remaining groups is increasing, leading to an analysis that caution is needed when investing.
According to the Korea Exchange on the 7th, trading in Daeyu Plus (000300) and Winia is suspended.
As Winia is the third affiliated company to apply for corporate rehabilitation following Winia Electronics and Dayou Plus, it appears that the volatility of the remaining stocks is increasing. On the 5th, Winia announced that it defaulted on maturity notes issued by the company worth 3.62574 billion won. At the same time, it was announced that it had applied to initiate rehabilitation procedures at the Seoul Rehabilitation Court on the 4th for the purpose of normalizing management and preserving the value of the company as a going concern in the future.
Corporate rehabilitation is a corporate restructuring process conducted under the supervision of the court. Winia explained, “The Seoul Rehabilitation Court will decide whether to initiate rehabilitation procedures through review of the application for initiation of rehabilitation procedures and attached documents submitted by our company.”
Winia is a company that opened the domestic kimchi refrigerator market by introducing Dimchae in 1995. At one time, it recorded annual sales of 1 trillion won, but it faced a crisis due to financial difficulties following the coronavirus. In fact, Winia’s consolidated operating loss in the first half of this year was KRW 69.5 billion, an increase from the same period last year (-KRW 43.7 billion). As of the end of the first half of the year, the capital erosion rate was 374%. The industry cites the decline in the competitiveness of Winia brands such as Dimchae amid the overall downturn in the home appliance market due to the worsening real estate market as the main cause of the worsening performance.
Dayou Plus, another Daeyu Winia Group affiliate, also announced on the 5th that a maturity note worth 317.13 million won was dishonored through a public announcement. Daeyu Plus is also in danger of having to repay early the bonds with warrants (BW) issued in March. Currently, non-payment has occurred due to insufficient funds to meet the debt. The unpaid amount is a total of 29.6 billion won, including 28.6 billion won in principal and 1 billion won in interest.
Meanwhile, concerns are growing that the risk of bankruptcy might spread to all affiliates as financing conditions worsen due to credit rating downgrades following applications for rehabilitation procedures. Recently, Korea Ratings downgraded Dayou Plus’ credit rating from ‘BB-‘ to ‘D’. Nice Credit Rating lowered Winia’s credit rating from ‘BB-‘ to ‘B-‘. The credit ratings of other affiliates were also downgraded one following another. Korea Ratings downgraded the credit ratings of Dayu ATech, Dayu AP, and Dayu EP from ‘BB-‘ to ‘B-‘, respectively, and Korea Credit Rating downgraded Dayu Atech’s credit rating from ‘BB-‘ to ‘B-‘. .
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