Emart and Shinsegae Agree on Termination of Put Option... Common Stock Sale by Year-End

Sale of All 1,316,492 Common Shares by Year-End

Shinsegae Group has decided to resell its 30% stake in SSG.com held by financial investors (FI) to a third party. However, if no buyer emerges by the end of the year, Shinsegae Group will repurchase all of these shares.

Jung-gu Sunhwa-dong Emart Headquarters. Photo by Jo Yongjun jun21@

On the 4th, Emart and Shinsegae announced through a public disclosure that they have amicably reached an agreement and signed a contract regarding the sale of shares held by SSG.com's financial investors, Affinity Equity Partners (Affinity) and BRV Capital Management (BRV).

On Tuesday, June 4, Emart Co., Ltd. and Shinsegae Co., Ltd. amicably completed an agreement and signed a contract with Affinity and BRV, the financial investors of SSG.com Co., Ltd., regarding the sale of FI-held shares.

According to the contract they signed this time, the FIs will sell all 1,316,492 common shares of SSG.com they currently hold to one or more third parties designated by Shinsegae Group by December 31 of this year. Each FI holds 658,246 shares.

However, if no buyer for the FI shares appears by the end of this year, Shinsegae Group must repurchase these shares. The amount is expected to reach 1 trillion KRW. Additionally, prior to this contract, Emart, Shinsegae, and the FIs mutually agreed that the put option clause included in the share purchase agreement made in 2019 has expired.

Previously, in October 2018, Shinsegae Group decided to receive investments from the sovereign wealth fund Affinity and venture capital BRV. Shinsegae Group established SSG.com based on this investment. Affinity and BRV Capital invested a total of 1 trillion KRW in SSG.com in two rounds, 700 billion KRW in 2019 and 300 billion KRW in 2022.

At the time of investment, Shinsegae Group granted the FIs a 'put option' (the right to sell shares at a predetermined exercise price). This means that if SSG.com fails to meet certain conditions such as mandatory obligations, Shinsegae Group must buy back the investors' shares. They have been disputing whether the conditions for exercising the put-back option have been met.