The government selected IBK Investment & Securities as the underwriter for the sale of the equity stake in NXC, which was paid as inheritance tax by the late Kim Jung-ju, the founder of Nexon. After the initial bid for the selection of the underwriter was unsuccessful, the government has completed the selection process following a reannouncement.
According to the investment banking (IB) industry on the 11th, the Korea Asset Management Corporation (KAMCO) selected IBK Investment & Securities as the underwriter for the sale of the equity stake in NXC. In the previous selection process held in October, only one company participated, resulting in an unsuccessful bid. According to Article 11 of the Enforcement Decree of the Framework Act on National Contracts, it stipulates that 'competitive bidding is established with two or more valid bids.' The government then publicly announced again last month and completed the selection of the underwriter earlier this month.
The sale target is the entire 851,968 shares (23.9%) of NXC equity owned by the government. This amount was paid to the government in May 2023 by the family of the late founder Kim for inheritance tax. NXC is the holding company of the Nexon Group, which has Nexon Japan listed in Japan as a subsidiary and Nexon Korea in Korea as a grandchild company.
With IBK Investment & Securities selected as the underwriter, the procedure for selling the NXC equity is expected to be back on track. Previously, the Ministry of Strategy and Finance attempted to directly sell the NXC equity in two rounds. However, the sales were unsuccessful due to high prices. The government currently values the NXC equity at approximately 4.7 trillion won. This figure combines the net asset value of the unlisted NXC equity with a 20% management premium.
In the industry, there are assessments that the possibility of successfully selling the NXC equity held by the government is unlikely. This is because it is a holding company and not a subsidiary of Nexon Japan, plus it offers a minority stake, which diminishes its attractiveness. Even if an investor acquires the entire stake, they would not hold direct ownership of the equity of Nexon Japan, the operating company. Furthermore, since NXC is an unlisted company, the difficulty of recovering funds through future sales is also high.
However, the government is reportedly willing to significantly lower the equity price in this sale, which is being conducted through an underwriter after the unsuccessful public sale. The Ministry of Strategy and Finance has set the non-tax revenue from the sale of NXC equity next year at 3.7 trillion won. This amount is approximately 1 trillion won less than the previous public sale.
If this sale is successful, IBK Investment & Securities is expected to receive a substantial success fee. According to KAMCO, the success fee will be paid by applying the single commission rate proposed by the underwriter to the sale amount. KAMCO required that the commission rate be presented within 0.3%. If the equity is sold for 3.7 trillion won, approximately 11 billion won would be received as a success fee.