Entutec Sells Part of Ace Factory Shares... "9.2 Billion KRW Profit Generated"

[Asia Economy Reporter Jang Hyowon] Semiconductor equipment parts company N2Tec exchanged part of its shares in drama production company Ace Factory for shares of Netmarble F&C. The exchange method involved selling Ace Factory shares and then participating in Netmarble F&C's paid-in capital increase.

On the 5th, N2Tec announced that it would sell 54,646 shares of Ace Factory to Netmarble F&C for 13.26 billion KRW, which is 14.77% of its equity capital. After the sale, the number of shares owned will be 52,503 shares (16.33%). Additionally, the sales proceeds will be used to participate in Netmarble F&C's paid-in capital increase. The expected number of shares to be acquired is 94,719 shares (0.74%).

An N2Tec official stated, "This is a transaction where part of Ace Factory shares are sold to Netmarble F&C while simultaneously acquiring shares," adding, "We expect to enhance Ace Factory's corporate value through synergy creation with Netmarble F&C."

This transaction generated a disposal gain of 9.2 billion KRW for N2Tec from the sale of Ace Factory shares. The disposal gain is expected to be reflected as non-operating income in 2022. Notably, N2Tec previously sold Ace Factory shares for 12.9 billion KRW in April, realizing a disposal gain of 6.2 billion KRW.

A company representative said, "The total consideration from the partial sale of Ace Factory shares, which were acquired at a cost of 25 billion KRW, amounts to 26.2 billion KRW so far, with a disposal gain reaching 15.5 billion KRW," adding, "We have valued up Ace Factory, originally acquired for 25 billion KRW, to approximately 52.1 billion KRW."

Netmarble F&C, which N2Tec is acquiring shares from, is a game developer in which Netmarble holds an 83.54% stake as of the end of Q3. It is developing the collection-type RPG (role-playing game) 'Demis Reborn.' It also owns VFX (visual effects) specialist Metaverse Entertainment (49.0% stake), Metaverse World (80%), both established in August last year. Metaverse Entertainment produces digital humans and manages virtual idol businesses, while Metaverse World creates NFT (non-fungible token) products and metaverse universes using blockchain technology.

N2Tec is pursuing various new businesses to prepare for fluctuations in the global semiconductor market. After acquiring drama production and talent agency Ace Factory, it enhanced corporate value and secured cash through share sales. It is also expected to become the largest shareholder by participating in the paid-in capital increase of KOSDAQ-listed G1 Energy on the 21st.

An official explained, "As of the end of Q3 this year, N2Tec has total assets of 112.1 billion KRW, total liabilities of 27.3 billion KRW, a debt ratio of 32%, and cash equivalents of 55.2 billion KRW, resulting in an excellent liquidity ratio of 240%," adding, "After acquiring G1 Energy without a management premium, we plan to explore new businesses through renewable energy and geothermal energy projects, which are future energy sources."

Meanwhile, at the extraordinary general meeting scheduled for the 21st, N2Tec will appoint Vice President Yoo Jaehoon, a former analyst at Hyundai Heavy Industries and NH Investment & Securities, as a new inside director, and CEO Heo Seung of Seum TNT as a new outside director.

Additionally, to strengthen internal accounting management, a Transparent Management Committee will be established within the board of directors. New business purposes will include renewable energy projects, geothermal energy-related businesses, salt lake development and extracted mineral sales, and salt lake lithium recovery and production process development and sales.