Netmarble sells shares of Kakao units to raise $700 mn in August

South Korea’s Netmarble Corp. has earned 816.9 billion won ($703 million) so far in August alone by selling shares of KakaoBank Corp. and Kakao Games Corp. Analysts say that the cash raised from the bulk deals will be used to fund the company’s $2.2 billion acquisition of the global social casino game publisher SpinX Games.

Netmarble said that it sold 1.6 million shares of KakaoBank at 133.1 billion won ($114.5 million) in off-hours block trading on Aug. 25. The deal follows its sale of 6 million KakaoBank shares at 430.2 billion won ($370.1 million) during the trading hours of Aug. 10.

Netmarble still owns 1.6% of KakaoBank’s shares, from which it can additionally raise about 500 billion won ($430.2 million) if it sells them at the current market price. As Netmarble has put 91.7 billion won ($78.9 million) in KakaoBank to date, the game company will likely enjoy more than ten times return overall from its investment in the bank.

Moreover, Netmarble made a full exit from its Kakao Games investment on Aug. 12 by selling 3.2 million shares at 253.6 billion won ($218.2 million). Netmarble made an investment return of more than 200 billion from Kakao Games, in which it had invested 50 billion won ($43 million) in 2018.

“We will secure higher levels of liquidity and strengthen financial stability from selling our shares of Kakao units,” said Netmarble.

Securities firms note that the primary objective of Netmarble’s vigorous trading activity in August is to raise funds for its SpinX Games acquisition at $2.2 billion.

The analysts also highlight that Netmarble still owns 3 trillion won ($2.6 billion) worth of other company shares. Specifically, it holds an 8.88% stake in its rival NCSoft Corp., a 19.9% stake in BTS agency HYBE Co., and an 11.06% stake in YJM Games Co.

Write to Joo-wan Kim at kjwan@hankyung.com
Daniel Cho edited this article.