The North Face supplier Youngone lends $177 mn to Scott

Youngone Corp., a South Korean clothing manufacturer to global outdoor brands like The North Face and Patagonia, said on Thursday it has decided to lend 150 million Swiss francs ($176.8 million) at a 4.6% interest rate to its Switzerland-based subsidiary Scott Corp.

The Korean apparel firm completed a transaction of 100 million francs earlier this week and will provide the remaining 50 million francs later this year, according to its regulatory filings. The loan matures on Dec. 27, 2024.

Youngone holds a more than 50% stake in Scott, a retailer of bicycles, winter sports equipment, motorsports gear and sportswear. The Swiss firm operates in Europe, the US, South Africa and India.

Scott will use the proceeds to back its business operation, and a financial controller designated by the Korean parent will oversee the use of the fund.

Last year, the Swiss firm posted 60.5 billion won ($46.3 million) in net profit, up 26.4% on-year, according to Youngone’s financial statement.

Meanwhile, Youngone has been facing a legal conflict with Scott’s founder and second-largest shareholder Beat Zaugg since the Korean firm requested an arbitration by the International Chamber of Commerce (ICC) in September 2022.

In January 2015, Youngone and Zaugg entered into a shareholders' agreement on operating Scott. But Youngone encountered a material breach of the contract by Zaugg and has been seeking the ICC's confirmation of the Korean firm’s call option concerning Scott shares held by Zaugg.  

(Updated with the request for ICC arbitration)


Write to Ji-Yoon Yang at yang@hankyung.com

Jihyun Kim edited this article.