NXC, Nexon's Holding Company, 30% Stake Secondary Block Sale Fails... Proceeding with Private Contract

[Image source=Yonhap News]

The 4.7 trillion won worth of shares in the holding company NXC, paid as inheritance tax by the family of the late Kim Jung-ju, founder of Nexon, failed to sell in the second public auction following the first auction.

According to the Korea Asset Management Corporation (KAMCO) online auction system (Onbid) on the 29th, the second bidding for the NXC shares auction ended in failure. The minimum bid price was 4.7149 trillion won.

The shares up for auction this time represent 29.3% (851,968 shares) of NXC, which the bereaved family inherited after the death of Kim Jung-ju, Nexon's founder, and paid to the Ministry of Economy and Finance as inheritance tax. With the inherited assets reaching around 10 trillion won, the family faced an inheritance tax burden of about 6 trillion won, considered the largest amount of national tax paid in kind to date. Payment in kind refers to the procedure of paying inheritance tax with securities or real estate instead of cash.

In the market, it was expected that foreign capital such as Chinese IT company Tencent and Saudi Arabia's Public Investment Fund (PIF) would participate in the second auction. However, there were also high expectations that the auction would fail again. Since NXC is an unlisted company and even if the government-held shares were fully acquired, the buyer would only become the second-largest shareholder, making it difficult to secure management rights. The largest shareholder and director Yoo Jung-hyun, spouse of the late founder Kim Jung-ju, holds 34%, and their two children each hold 17.49%, so the family’s shares still amount to 70% even after the inheritance tax payment in kind.

Due to this failure, future share sales will proceed through private contracts. A KAMCO official stated, "Private contracts will proceed at the final failed bid price," adding, "Participation in private contracts is only possible at the final failed bid price."