Timef Faces Difficulties in Rehabilitation Process Negotiations... Creditors Prioritize Company Normalization

Disagreement Among Small Creditors on Repayment Statement
Second Meeting Scheduled for the 30th

Tmon and Wemakeprice presented a self-rescue plan that prioritizes repayment to small creditors. However, the plan was scrapped as creditors demanded the companies' swift normalization.

On the 13th, the Seoul Bankruptcy Court's Rehabilitation Division 2 (Presiding Judge An Byung-wook) held a rehabilitation procedure consultation meeting attended by the two companies, the creditors' council, the emergency response committee of sales vendors, representatives of some sales vendors, government agencies, and public institutions.

Ryu Hwa-hyun, CEO of Wemakeprice (left), and Ryu Kwang-jin, CEO of TMON, are answering reporters' questions after concluding the rehabilitation procedure consultation meeting related to the TMON and Wemakeprice incident at the Seoul Bankruptcy Court in Seocho-gu, Seoul, on the afternoon of the 13th.
[Image source=Yonhap News]

The consultation meeting was part of the Autonomous Restructuring Support (ARS) program, where debtors and creditors seek voluntary solutions, and was held privately for about an hour starting at 3 p.m.

During the meeting, the self-rescue plans submitted by the two companies were discussed. According to the plans, the companies expressed their intention to normalize by improving profitability through workforce restructuring, reducing expenses such as rent, and reorganizing the business structure focused on profit margins. They also proposed reforms to the settlement system, including shortening the payment cycle.

However, opinions diverged regarding the plan to prioritize repayment to small creditors. Some creditors demanded the companies' rapid normalization rather than repayment to small creditors.

After the consultation, Ryu Kwang-jin, CEO of Tmon, and Ryu Hwa-hyun, CEO of Wemakeprice, shared their views on the discussions and future procedures with reporters.

CEO Ryu Hwa-hyun said, "There were comments urging us to invest even the money for small creditor repayment into normalization rather than prioritizing repayment to small creditors, so we plan to correct that. Regardless of the method, we aim for 100% repayment."

Both CEOs also expressed their commitment to focusing on finding investors, a prerequisite for the self-rescue plan. They estimated that each company requires investments on the order of 100 billion KRW to normalize.

CEO Ryu Hwa-hyun said, "The creditors present today described e-commerce as melting ice, which melts faster over time, so they hope the procedures will be decided quickly. We also believe that securing investors as soon as possible is the most important."

He added, "Since we have a deadline until the end of this month, we will continue meeting investors to secure Letters of Intent (LOI) or Letters of Commitment (LOC)."

Regarding the proposed shortening of the settlement cycle in the self-rescue plan, he said, "It was naturally accepted that we should move toward such a standard. I think all e-commerce will have to operate this way in the future."

CEO Ryu Kwang-jin commented on the plan to normalize the companies through private equity fund investments, stating, "The creditors emphasized maximizing profits but also agreed to a resale model within three years."

Additionally, the two CEOs revealed that the current claims against related parties such as Qoo10 amount to about 200 billion KRW for Tmon and 30 to 40 billion KRW for Wemakeprice. Their plan is to convert these claims entirely into equity and then execute a free capital reduction.

The court decided to allow more time to attract investors, a key prerequisite of the self-rescue plan, and to prepare realistic alternatives before further discussions. The next rehabilitation procedure consultation meeting is scheduled for 3 p.m. on the 30th.

Shin Jeong-kwon, representative of the emergency response committee of sales vendors who attended the meeting, said, "Since the normalization plan was not concrete, I expect it to be supplemented and prepared by the 30th. I urged them to prepare quick and realistic alternatives before customers and vendors leave."