Shinsegae to sell $728 million in SSG.com shares after IPO failure

Logo of SSG.com [JOONGANG ILBO]

Shinsegae will sell shares worth around 1 trillion won ($728 million) held by financial investors (FIs) in SSG.com to a third party by this year after failing to go public by a promised deadline.

Emart and Shinsegae said Tuesday that they signed a share purchase agreement with shareholders of SSG.com, including Affinity Equity Partners and BRV Capital Management.

The agreement entails the sale of over 1.3 million shares, or 30 percent of the total shares held by the two FIs to a third party designated by Shinsegae Group by 2024. Should Emart and Shinsegae fail to find suitable investors, they will have to buy back the shares of SSG.com that were previously sold to the FIs.

Affinity Equity Partners and BRV Capital invested 1 trillion won back in August 2018, securing a 15 percent stake in SSG.com, respectively.

The investors injected capital into the company with the expectation of an initial public offering. However, SSG.com’s performance has been rather lukewarm due to stiff competition in the e-commerce sector.

This led to concerns that the FIs might exercise their put options, which could result in Shinsegae losing control of SSG.com.

However, both parties agreed to suspend the effectiveness of the put option.

BY CHOI HAE-JIN [choi.haejin@joongang.co.kr]