[Special Stock] SNK Enters Upper Limit Price After FSC Approves OTC Trading...

[Asia Economy Reporter Lee Seon-ae] SNK has hit the upper price limit.

As of 9:52 AM on the 19th, SNK is trading at 32,500 KRW, up 25.24% from the previous day.

This surge is interpreted as a reaction to the news that the Financial Supervisory Service has approved the over-the-counter (OTC) transaction for SNK, a KOSDAQ-listed gaming company. With the OTC transaction approval, the acquisition of SNK by EGDC (Electronic Gaming Development Company), wholly owned by Saudi Crown Prince Mohammed bin Salman, is expected to proceed smoothly.

The Financial Supervisory Service reviewed whether the OTC transaction was necessary due to unavoidable reasons and reportedly approved it without any issues.

Meanwhile, on November 26 last year, SNK disclosed that CEO Gal Ji-hwi, who holds 100% of the shares of the largest shareholder Hong Kong company Juikaku, signed a stock purchase agreement to transfer 28.8% of SNK shares (6,065,798 shares) to EGDC. The total transfer amount was 207.34572 billion KRW (14,183 KRW per share). The scheduled date for the change of the largest shareholder was January 12, 2021. On the same day, Perfect World, the second-largest shareholder from China, also agreed to sell its 4.5% stake (947,781 shares) to EGDC at 34,183 KRW per share. EGDC is 100% owned by the MiSK Foundation, established by Crown Prince bin Salman in 2011. This is the first time that Saudi royal 'oil money' has been invested in a domestic listed gaming company. As a result, investor interest intensified, and after the news of the largest shareholder change was announced, SNK's stock price hit the upper limit for two consecutive trading days. On November 30, 2020, the stock closed at 21,450 KRW, up 30.00% from the previous trading day.

However, on the 12th of last month, after market close, SNK announced that "EGDC decided to postpone the payment of the total acquisition amount of 207.3 billion KRW, originally scheduled for that day, to March 17," raising suspicions about possible issues in the acquisition process. SNK explained that the change in contract schedule was due to the fulfillment of preconditions for the main contract. Initially, EGDC planned to finalize the stock purchase agreement and payment by January 12, assuming all preconditions for transaction closure, including the Financial Supervisory Service's OTC transaction approval, were met. Following the payment delay news, on January 13, the stock closed at 20,950 KRW, down 27.76% from the previous trading day.