JTBC raises $366 mn from Tencent, Praxis Capital

South Korean TV drama production firm JTBC Studios Co. will raise a total of 400 billion won ($366 million) by issuing convertible preferred shares to China-based IT giant Tencent Holdings, and domestic private equity firm Praxis Capital Partners, according to the company's regulatory filing on Dec. 29.

Praxis will commit around 300 billion won to acquire a 21.8% stake, becoming the second-largest shareholder of JTBC Studios. Tencent will inject 100 billion won to hold a 7.2% stake. The Korean production company plans to use the funds to expand its content and streaming services.

A number of potential bidders had taken interest in the drama studio's pre-IPO placement, with mostly PE firms emerging as strong contenders given that strategic investors were wary of investing in a stake that may not offer management rights.

Praxis Capital and Tencent competed up until the end to win the pre-IPO stake sale. The domestic PE firm hoped to acquire a relatively bigger stake, whereas Tencent focused on establishing a strategic partnership to boost its over-the-top (OTT) services as a major shareholder with around a 5% stake.

JTBC Studios decided to split the stake sale for both parties. The latest investment puts the company’s enterprise value at around 1.4 trillion won.

The Korean drama studio oversees the production and sale of content to major OTT operators, including Netflix, alongside production studios at home and overseas.

JTBC Studios has produced a number of global hits this year, which have been among the most-viewed series on Netflix, such as The World of the Married, a remake of BBC One's Doctor Foster series; and Itaewon Class, a rags to riches drama based on a popular webtoon.  

Last year, the company posted 188.9 billion won in revenue with an operating profit of 14 billion won.


Write to Jun-ho Cha at chacha@hankyung.com
Danbee Lee edited this article.