KCCW and Each Company's Rehabilitation Plan Progressed Separately
Creditors' Opinions to Be Collected Later for Integration
Immediate Financially Strapped Victims Face Increased Confusion
Gu Young-bae, CEO of Qoo10, is pushing for the merger of TMON and WEMAKEPRICE (Timep) and the separate restructuring plans prepared by each Timep company are ultimately being pursued independently. Even though there is a high possibility of consolidating efforts on a feasible plan, it is difficult to compensate the victims, and the separate self-rescue plans running individually are making it harder for the victims, critics say.
On the 13th, Gu Young-bae told Asia Economy, "The restructuring plans of each company will be pursued separately, and later the opinions of creditors will be gathered to integrate them." He explained that apart from establishing a new corporation, KCCW (K-Commerce Center for World), as a platform for the Timep merger, the restructuring plans discussed at the first restructuring procedure council meeting on the same day will be carried out as they are.
Koo Young-bae, CEO of Qoo10 Group, is greeting at the urgent inquiry on the 'Timon and Wemakeprice settlement and refund delay incident' held at the National Assembly's Political Affairs Committee on the 30th. Photo by Hyunmin Kim kimhyun81@
Gu said, "Since the Timep merger requires court approval, we will first establish the new corporation and then proceed with the preparation work for the merger of the two companies and business normalization centered on this corporation." Qoo10 plans to reduce 100% of the shares it holds in TMON and WEMAKEPRICE with the consent of stakeholders, and to place Gu’s own 38% stake in Qoo10 into a blind trust for the merged corporation. Gu claims that KCCW will control the entire Qoo10 group, creating synergies in the Asian market, as well as in the US, European, and Indian markets. To this end, Qoo10 has started accepting letters of intent for the conversion of unsettled payments into convertible bonds (CB) from Timep sellers.
Gu’s plan inevitably conflicts with the self-rescue plan prepared by Timep. The self-rescue plans submitted to the court by the two companies, which entered the court-approved voluntary restructuring support (ARS) program, reportedly include attracting investments from restructuring funds to repay debts to a significant number of creditors and plans to resell the two companies within three years.
Without Qoo10’s consent, key elements of the self-rescue plan such as M&A are practically difficult to proceed with, but Qoo10 is fixated on the merger into KCCW, which contradicts this. Qoo10 holds 100% of TMON shares and 72.2% of WEMAKEPRICE shares together with Qoo10 Korea. Gu also dismissed the idea of separate sales, saying, "It is difficult to recover damages by selling TMON or WEMAKEPRICE separately."
However, the Timep merger is considered "one mountain after another." They must persuade the urgently cash-needing victim sellers to accept KCCW shares instead of unsettled payments, but the total number of creditors reaches 110,000. The Timep Victim Sellers Emergency Countermeasure Committee stated, "If numerous creditors participate as shareholders, they will suffer significant dilution of their shares in the future." The industry views the victims’ participation in Gu’s plan skeptically.
Moreover, since the entire Qoo10 group’s governance structure must be changed, the consent of existing shareholders and financial investors (FIs) must also be obtained. It is uncertain whether the court will approve the merger of the two Timep companies. An industry insider pointed out, "There are tens of thousands of sellers urgently needing to receive unsettled payments, and the creditor council formation is already facing difficulties. Gu’s mention of mergers or shareholder participation in the new corporation is only adding to the confusion."
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