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Shinsegae Group Chairman Chung Yong-jin. (Photo=Shinsegae Group) |
[Alpha Biz= Reporter Kim Jisun] Shinsegae Group has decided to resolve its investment funding issues by divesting the stake held by the financial investor (FI) in SSG.com to a third party.
Emart and Shinsegae announced on the 4th that they have agreed to sell all of the ordinary shares of SSG.com, totaling 1,316,492 shares (30% of the total), held by Affinity Equity Partners and BRV Capital to one or more third parties designated by Shinsegae Group by the end of this year.
According to the agreement between Shinsegae Group and the FI, the put options (rights to sell shares at a specific price) under the sales contract have also been terminated.
Shinsegae Group explained, "Both parties shared a more progressive direction for the future of SSG.com in the rapidly changing e-commerce market and reached this agreement based on an amicable relationship."
Affinity Equity Partners and BRV Capital secured a 15% stake each in SSG.com through a total investment of 1 trillion won, including 700 billion won in 2019 and 300 billion won in 2022, under an investment agreement with Shinsegae Group in October 2018.
However, with the delay in SSG.com's initial public offering (IPO), pressure from the FI to recover its investment funds intensified.
The investment agreement included provisions stating that if SSG.com fails to exceed a total transaction amount (GMV) of 5.16 trillion won by 2023 or fails to receive opinions from multiple investment banks (IBs) that it is ready for an IPO, the FI can demand that Shinsegae Group repurchase all of its shares.
With the exercise of the put options becoming possible as of May 1st, negotiations between the parties regarding the recovery of the investment funds have been ongoing.
Considering that the put option is exercisable until April 2027, the relatively quick agreement reached by both parties has been positively received in the industry.
It is known that Shinsegae Group has already started discussions with potential new investment candidates to replace the existing FI.
It is expected that the outline of the new investor will emerge as early as the second half of this year. The selling price is reported to be approximately 1 trillion won, which is roughly the original investment capital of the FI.
AlphaBIZ Kim Jisun(stockmk2020@alphabiz.co.kr)
