Line to go public and raise about 6 trillion won

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Line to go public and raise about 6 trillion won

Line, a mobile messenger service owned by Korea’s top search engine Naver, will be publicly traded on both the Tokyo and New York stock exchanges starting next month. It is expected to be this year’s largest tech IPO in the global market.

The IPO of the messenger company, which is considered a Japanese company as its headquarters is based in Tokyo, comes just five years after it was founded. It is the first case of an independently managed overseas affiliate of a Korean company being listed on global stock markets.

After board meetings on Friday, Line and Naver announced that Line will be listed on the New York exchange on July 14 and on the Tokyo exchange on July 15.

Once the company goes public, it is estimated to be worth 6 trillion won, or around 580 billion yen.

“We announce that the Naver board members have agreed to issue shares of its wholly owned subsidiary Line,” the IT company said in a statement released Friday after simultaneous board meetings in Seoul and Tokyo.

“This allows Line Corporation to raise money so that it can respond more quickly to global corporates that are armed with bigger capital and brands. We intend to use the newly raised money to enhance the company’s global competitiveness, including pursuing an M&A with oversea companies,” the statement continued.

Naver said it will newly issue 35 million shares, of which 13 million will be sold to Japanese investors. It will kick off a series of investment briefings from Monday and start estimating stock demands from July 11. They will take orders from investors between July 12 and 13.

“This IPO is meaningful because Naver has turned a totally separate business into a listed company,” a Naver spokesman said.

This is not the first time Naver has attempted an IPO for Line. It tried in July 2014 but decided to hold back until the market improved.

Line isn’t the first Korean IT company to be traded on the Tokyo exchange. Although Nexon was founded in Korea, it moved its headquarters to Japan and went public on the Tokyo exchange in 2011. The market capitalization of Nexon after it went public was 550 billion yen ($5.2 billion).

Since starting in 2011, Line has amassed 200 million active monthly users in 230 countries.

It has large user bases in other Asian markets, including Taiwan and Thailand, although Kakao dominates the Korean market.

The messenger service’s popularity took off during the earthquake, tsunami and nuclear accident in March 2011, when Japanese used it to contact each other when the phone system was overloaded.

The company’s cute characters are also an enormous hit. It currently has 44 stores that sell everything from coffee mugs to dolls and stickers in 11 countries.

Last year, the company’s sales reached 120 billion yen, or 1.3 trillion won, a 40 percent increase year on year.

The IPO is being managed by Japan-based Nomura Securities and U.S.-based Morgan Stanley, Goldman Sachs and JP Morgan, according to a regulatory filing on Friday.

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