NHN "Payco, 130 Billion Won in Uncollected Accounts Receivable Due to T-Mef Incident... Collaboration with KCP"

On the 27th, NHN announced that its subsidiary NHN Payco has approximately 130 billion KRW in uncollected accounts receivable related to the Tmon and Wemakeprice (Timep) incident.

NHN stated, "Of the uncollected accounts receivable, about 10.2 billion KRW was accounted for as bad debt as of the end of June," adding, "While we are making various efforts to recover the funds, uncollected receivables deemed unlikely to be recovered may be recognized as additional bad debt expenses in the third quarter results this year."

NHN posted a 'Shareholder Letter' on its website under the name of CEO Jung Woo-jin. CEO Jung said, "We take this incident very seriously and gravely, and we will use this as a mirror to thoroughly reorganize our risk management system and respond promptly."

He continued, "All clients linked with Payco will be processed so that payments can be settled normally within the due date, and to this end, Payco plans to resolve liquidity shortages through borrowing from financial institutions and NHN."

CEO Jung also explained, "Payco had been visualizing business efficiency achievements by reducing its annual operating loss from about 49.6 billion KRW in 2022 to about 15.7 billion KRW in 2023, but if this loss is recognized, the goal of operating profit expected next year will inevitably be postponed."

He added, "Under new management, we will maximize synergy with KCP and completely reorganize the business structure and services to achieve an operating profit structure by 2027."

CEO Jung said, "In 2023, we have liquidated a total of 14 subsidiaries, and this year we are also taking steps to liquidate more than 10 additional subsidiaries," adding, "We will present the direction for liquidating marginal businesses within the year and aim to complete it by the first half of 2025."

Meanwhile, Payco held a town hall meeting chaired by COO Jung Seung-gyu on the same day to explain the company's current status and future plans to strengthen competitiveness to its employees. At this meeting, to enhance collaboration with KCP, it was shared that the current Payco office will be relocated from Pangyo Play Museum, where NHN headquarters is located, to Guro Digital Complex, where KCP is based, and plans to streamline business and organization were discussed.