[Exclusive] South Korea's Largest Shared Office Holding Company Plans to Sell 'Shin Hyun-sung's Stake'

Removing the Connection Between 'Terra·Luna'
Concerns Over FastFive IPO Hurdles if Shares Remain
If Sale Is Difficult, Consider Delegating Voting Rights

[Image source=Yonhap News]

[Asia Economy Reporter Kwangho Lee] The holding company of FastFive, the largest shared office platform in South Korea, FastTrack Asia, is expected to have its shares released to the market. Concerns have arisen that the ‘owner risk’ associated with FastTrack Asia could negatively impact FastFive’s business and its initial public offering (IPO).

According to the investment banking (IB) industry on the 13th, Shin Hyun-sung, chairman of FastTrack Asia, is currently pursuing the sale of his shares in FastTrack Asia. FastTrack Asia is the holding company of FastFive and holds 32.31% of FastFive’s shares. Besides FastTrack Asia, financial investors (FIs) such as venture capital (VC) firms Atinum Investment (Atinum Growth Investment Association 2018), TS Investment (TS 2015-9 Growth Strategy M&A Investment Association), and Shinhan Venture Investment (Neoplux Market-Frontier Secondary Fund) collectively hold 22.5% of FastFive’s shares.

These financial investors reportedly requested Chairman Shin to divest his shares in FastTrack Asia. This is due to concerns that the Terra-Luna incident involving Chairman Shin could become an obstacle to FastFive’s planned IPO. Shin is known as a co-founder of Terraform Labs and a key figure in the collapse of the cryptocurrency Terra and Luna. Recently, prosecutors investigated Shin regarding this matter, but the court dismissed the warrant. Nevertheless, the industry still views the risk as ongoing.

An IB industry official said, "FastFive aims for an IPO next year," adding, "There are ongoing concerns that the relationship with Chairman Shin could provoke public sentiment." He continued, "As concerns that this could act as a hurdle to the listing persist, the FIs seem to feel the burden," and added, "Chairman Shin himself somewhat understands this and has made a decision."

If Chairman Shin’s share sale does not proceed smoothly, FastFive’s financial investors plan to have him step back from management through methods such as proxy voting. According to the corporate registry, Chairman Shin extended his position as a non-executive director as of March last year and is currently serving as an executive at FastTrack Asia.

Previously, in December 2020, FastFive was asked by the Korea Exchange (KRX) to present a business model other than subleasing. Consequently, it voluntarily withdrew its plan to list under the ‘Tesla requirement’ (listing of unprofitable companies). However, despite increasing deficits, it has continuously attracted external investments. It has also received many individual investments, increasing the proportion of small shareholders to 45.19%.

If FastFive enters the KOSDAQ, it will become the first shared office company to be listed. Its success or failure is expected to influence the IPOs and valuations of other shared office companies. During its previous IPO attempt, the company was valued at around 300 billion KRW. Attention is focused on how the market will evaluate it next year.