Infraware, Who Is the Largest Shareholder? ... Entering the 'Hotel and Bio' Business?

[Asia Economy Reporter Jang Hyowon] The largest shareholder of software company Infraware is changing. The new largest shareholder is an individual operating a hotel business. The corporation acquiring shares together is a company with an executive from the KOSPI-listed Wellbiotech serving as a director. As a result, the market expects Infraware to enter new business fields after the change in ownership.

◆ Infraware Leaving Selvas Group

According to the Financial Supervisory Service's electronic disclosure on the 7th, Selvas AI, the largest shareholder of Infraware, announced on the 3rd that it will transfer a total of 7,346,236 shares (19.61%), including its held shares (17.88%) and shares of related party Mr. Kwak Youngsoo (1.72%), to Mr. Ahn Youngjae (3,778,337 shares, 10.09%), Big Tree Investment (2,728,268 shares, 7.28%), and TIS Holdings (839,631 shares, 2.24%).

The acquisition price is 17.5 billion KRW, at 2,382 KRW per share. This price includes a management premium of 73.1% applied to the base price of 1,376 KRW, which was evaluated by an external institution. On the 3rd, Mr. Ahn and TIS Holdings paid 6 billion KRW in the first phase to receive some shares, and the second payment of 11.5 billion KRW is scheduled for the 20th.

Previously, Selvas AI had signed a contract on December 11 last year to transfer Infraware shares to Meister PE, but the contract was terminated on the 17th of last month as the buyer failed to pay the balance. Subsequently, a new contract was made with Mr. Ahn and others.

◆ New Owner is Hotel Chairman... Wellbiotech Director Also Participates

After the contract termination, Mr. Ahn Youngjae, who will become the largest shareholder, is the largest shareholder of a company called NAD. NAD operates the Benikea Wolmido The Bliss Hotel in Incheon. As of 2018, it recorded sales of 1.1 billion KRW and an operating loss of 460 million KRW. Mr. Lee Seunghyun, who is listed in the agenda for director appointment at Infraware's extraordinary general meeting, is the head of NAD's business division.

Big Tree Investment, which is acquiring shares together with Mr. Ahn, is a management consulting corporation with total assets of 271 million KRW. Mr. Wi Chanwoo serves as CEO, and Mr. Park Hakseop is an inside director. Mr. Wi is also included in the agenda for director appointment at Infraware's extraordinary general meeting.

Mr. Wi is the CEO of a corporation called Helio Advisory. Helio Advisory sold shares of Kosun Bio (formerly Hyunsung Vital), which were held by the Korea Heavy Ion Cancer Treatment Center, to the market in October last year. At that time, Hyunsung Vital caused market confusion by announcing the stock sale price higher than the actual price.

Inside director Mr. Park Hakseop is a director of the KOSPI-listed Wellbiotech. Mr. Han Cheolwoo, who is listed in the agenda for director appointment at the extraordinary general meeting, is an executive of a Wellbiotech affiliate. Wellbiotech has recorded operating losses for three consecutive years on a consolidated basis since 2016. As of the third quarter of last year, it had a cumulative deficit of 7.4 billion KRW.

TIS Holdings is a company established in 2018 with capital of 200 million KRW. Led by CEO Lee Daun, it mainly operates in the travel industry. TIS Holdings is an affiliate related to Mr. Ahn.

◆ Poor Performance, Seeking New Business?

Infraware is a software company that developed 'Polaris Office.' It also operates self-developed mobile games. As of the third quarter of last year, the sales composition was 51.4% from office solutions, 30.2% from games, and 13.9% from others.

The performance has been poor. On a consolidated basis, it has posted operating losses for four consecutive years since 2015. Last year, it recorded a cumulative operating loss of 3.3 billion KRW up to the third quarter.

Therefore, the market is focusing on how Infraware will be managed after the change in ownership. Infraware plans to add bio, travel business, and corporate mergers and acquisitions to its business objectives at the upcoming extraordinary general meeting. This is interpreted as an attempt to pursue new businesses beyond existing ones.

Mr. Lee Seunghyun, head of NAD's business division, said, "We are considering various new businesses," and added, "Specific plans for which businesses to pursue at Infraware will be known after the extraordinary general meeting."