This article was published on Feb. 6, 2025, at 3:03 p.m. on the ChosunBiz MoneyMove website.
KG Group is reviewing the possibility of selling KG Mobilians, a company involved in electronic payment processing services. This is interpreted as a result of deteriorating performance due to the unpaid settlement issue with Timon and Wemep (hereafter referred to as the Timon-Wemep issue).
According to the investment bank (IB) industry on the 6th, KG Group has requested proposals for the selection of advisory firms for the sale of KG Mobilians from major accounting firms and securities companies.
KG Mobilians is a PG (Payment Gateway) company providing electronic payment processing services. It handles consumer card payments, bank transfers, and simplified payment requests, mediating the receipt of payment amounts for merchants (sellers). It has fewer merchants than its parent company KGINICIS, which operates in the same PG sector, and focuses on mobile micropayments and gift card payments.
KGINICIS and its subsidiary KG Mobilians reported deteriorating performance last year due to the Timon-Wemep issue. KGINICIS recorded 1.3582 trillion won, a 1% increase compared to the previous year, but operating profit fell by 38.9% to 64.8 billion won during the same period. Net income decreased by 68% to 31 billion won. KG Mobilians also reported an operating loss of over 17 billion won in the third quarter of last year.
KG Group noted, "Major partners in the electronic payment business, Timon and Wemep, are exposed to liquidity risks due to the unsettled sales amounts, leading them to file for rehabilitation in court," adding, "We recognized significant credit risks regarding the claims against these partners and reflected the total impairment of approximately 26.223 billion won in current profits and losses."
KG Mobilians, listed on the KOSDAQ, had a market capitalization of about 170 billion won as of today. KGINICIS holds the largest stake at 50.72% (including special relations). The structure flows from KG Chemical to KGINICIS to KG Mobilians.
KG Group denied the sale of KG Mobilians. A KG Group official emphasized, "The sale of KG Mobilians is news to us." This official also reiterated, "Although losses were incurred last year due to the Timon-Wemep issue, we are determined to do well this year."
The 'Timon-Wemep issue' that occurred last July is an incident in which the electronic commerce platforms Timon and Wemep failed to timely settle payments to the partnering vendors. Consequently, many small and medium-sized vendors faced financial difficulties, and consumers suffered delays in refunds for purchased goods. The unpaid settlement amounts (damage) are estimated at 1.85 trillion won.