SK Square Sells E-Commerce Platform 11st to SK Planet to Repay National Pension Service Investment

SK Square will fully repay the investments made by financial investors (FIs), including the National Pension Service, in the e-commerce platform 11st. This will be done by transferring all shares of 11st to its subsidiary, SK Planet.

According to industry sources on October 29, SK Square held a board meeting on this day and signed a contract to sell 100% of its shares in 11st to SK Planet.

The current shareholders of 11st are SK Square (80.3%) and Nile Holdings (18.2%). Nile Holdings is a special purpose company (SPC) established by private equity fund (PEF) manager H&Q Korea, the National Pension Service, and Saemaul Geumgo to invest 500 billion won in 11st in 2018. Among these, the National Pension Service invested the largest amount, approximately 400 billion won.

SK Square is the largest shareholder of SK Planet, which will acquire the shares of 11st, holding an 86.3% stake. Once the transaction is completed, it is expected that the FIs, including the National Pension Service, H&Q Korea, and Saemaul Geumgo, will recover at least their principal investment, including any dividends received to date.

In addition, this transaction is expected to resolve the conflict that arose when SK Square did not exercise its call option on the 11st FI shares in 2023.

When SK Square attracted investment in 2018, it entered into a shareholder agreement with the FIs that included a "call and drag" clause. If an initial public offering (IPO) of 11st did not occur within five years, SK Square could exercise a call option to buy back the FI shares. If SK Square did not exercise this option, the FIs could trigger a drag-along right to sell all shares, including SK Square's stake, to a third party.

Although the IPO of 11st did not take place by 2023, SK Square did not exercise the call option. While exercising the call option has been considered standard practice in the capital market, SK Square determined that, given the decline in 11st's corporate value, exercising the call option as promised would be detrimental to the company.

Subsequently, a sale process led by the FIs was pursued but did not result in a final transaction. In this latest deal involving 11st, SK Square did not exercise the call option; instead, another shareholder is acquiring all of the shares in 11st.