Netmarble sells 6% stake in BTS label HYBE in block deal

South Korea’s leading game developer Netmarble Corp. said on Tuesday it sold a 6% stake in HYBE Co., the music label behind K-pop sensation BTS, in a block deal before the stock market opened on the same day.

For the block trade, Netmarble tapped institutional investors to offload 2.5 million shares in HYBE after the market closed on Nov. 5. Citigroup Global Markets Inc. led the bookbuilding process.

The divestment is valued at 523.5 billion won ($400.4 million) at an 8% discount to Monday’s closing price of 227,500 won.

Netmarble holds a 12.1% stake in HYBE after the deal, according to its regulatory filing on Tuesday. The game developer remains the second-largest shareholder of the music label, following HYBE founder Bang Si-hyuk with 31.6%.

HYBE shares fell 5.27% to finish at 215,500 won on Tuesday, underperforming the main bourse Kospi's 2.33% drop.

The game developer known for the Seven Knights series executed the block deal to improve its financial conditions, banking sources said.

The company’s short-term debts soared to 1.62 trillion won as it acquired the world’s leading casino game maker SpinX at around 2.6 trillion won in 2021. 

In June of this year, Netmarble aimed to raise $600 million-$700 million by issuing bonds exchangeable to an 8.9% stake in Korea’s leading game developer NCSOFT Corp. But the bond issue fell through due to tepid interest from institutional investors.

(Updated with HYBE's closing price)

Write to Jun-Ho Cha at chacha@hankyung.com

Jihyun Kim edited this article.