Bio company SillaJen announced Oct. 31 it will pay back 110 billion won (94.25 million), which it received by issuing convertible bonds, to Kiwoon Securities in March.

“The annual interest rate for convertible bonds that were issued, including the ones issued to Kiwoon, rose from 3 to 6 percent after Pexa-Vec woes in August,” a SillaJen official said in a statement. “To reduce the financial burden from high-interest rates, we agreed with our creditors and decided to pay them back earlier.”

According to industry sources, Kiwoom agreed to SillaJen’s plan, as it also hopes to eliminate the risks from investing in SillaJen.

The convertible bonds are due March 21, 2024. Kiwoom can exercise its conversion rights from March 21 next year, but industry watchers say it is highly unlikely for Kiwoom to exercise its rights. The company’s stock plummeted after its liver cancer treatment Pexa-Vec’s phase 3 clinical trial was halted when an independent data-monitoring committee in the US told the company Pexa-Vec was found to be ineffective as a liver cancer treatment.

As 110 billion won is close to the company’s total capital in the first half of last year, 112.7 billion won, industry insiders say SillaJen will have some difficulty maintaining the company without securing additional funds.

Regarding the issue, the company said it plans to raise funds in various ways, including attracting strategic investment partners once it obtains positive data from clinical trials for the treatment of kidney cancer.

By Song Seung-hyun (ssh@heraldcorp.com)