This article was posted on Oct. 22, 2025, at 11:25 a.m. on the ChosunBiz MoneyMove site.
Shinsegae Group's e-commerce company SSG.com (SSG.com) is approaching one year since it replaced its investors. Last November it changed the owners of 30% equity from BRV Capital and Affinity Equity Partners to banks and securities firms.
The financial investors' (FIs) investment in SSG.com draws attention because its structure is similar in many ways to the 11Street investment. The major shareholder holds a call option, and both involved FIs relying on the credit of a conglomerate to make the transaction. In SSG.com's case, although two years remain until maturity, there is concern that a high valuation of more than 3 trillion won was accepted at the time of last year's fundraising. As e-commerce companies' valuations fall year by year, some note that Shinsegae Group might, like SK Group, consider giving up the call option. The earliest time Shinsegae Group could decide to exercise the call option would come as soon as May next year.
According to the investment banking industry on the 24th, SSG.com sold 30% equity last November to a special purpose company (SPC) 'Olympus First.'
Olympus First is an SPC made up of six banks — Korea Development Bank, Shinhan Bank, NongHyup Bank, KB Kookmin Bank, Hana Bank and Woori Bank — and four securities firms — NH Investment & Securities, KB Securities, Hana Securities and Shinhan Investment Corp. SSG.com brought them in as new shareholders to allow existing investors BRV Capital and Affinity to withdraw their investment.
The maturity is three years, coming in Nov. 2027. It was confirmed there is no requirement (Q-IPO) that the company must complete a listing by maturity at a corporate valuation above a certain level. However, both sides agreed, if possible, to pursue an IPO before maturity, and in that process the FIs' sale of existing shares is expected to take place.
If, after the FIs' sale of existing shares, any amount remains unrecovered, Shinsegae Group must pay the FIs the difference between the "settlement reference amount" and the "sale proceeds." The settlement reference amount is, for the senior tranche, an annual interest rate of 4.7% (paid quarterly), and for the mezzanine tranche, a yield to maturity (YTM) interest of 6.0%. Industry sources say the FIs offered very favorable terms in consideration of their relationship with Shinsegae.
Both sides included a call option, a right of first refusal, and a tag-along clause. In other words, Shinsegae Group can buy back the FIs' equity at a set price at a specific time, and the FIs have the right to ask to "sell with" Shinsegae if Shinsegae sells its equity to a third party. It is understood there is no drag-along (the right for FIs to force Shinsegae's equity to be sold to a third party).
Shinsegae Group's call option can be exercised 18 months after the investment, meaning it becomes exercisable starting in May next year. If the FIs declare they will sell their equity, Shinsegae has three months to decide whether to exercise the call option and buy back their equity.
Banks and securities firms are said to have effectively executed the equity investment trusting Shinsegae Group's credit. Therefore, there is no clause to revalue SSG.com's corporate value annually or at set intervals and exercise a put option if it falls below a threshold. Companies pursuing an IPO or fundraising often revalue their corporate value at least once a year. There is also no drag-along that commonly accompanies a call option.
The contractual structure between SSG.com and the FIs resembles in part the contract SK Group's 11Street signed with the Nyle Holdings consortium. 11Street also structured a call option and drag-along when attracting investment from FIs. At the time, FIs such as the National Pension Service, H&Q Korea and MG Community Credit Cooperative also invested trusting SK Group's credit.
However, the major shareholder SK Group gave up exercising the call option, and as drag-along became difficult, it is reported that negotiations with H&Q are underway over a plan to accept repayment of only part of the amount.
The industry is expressing concern about SSG.com. Its financial condition shows no sign of improvement. Revenue in the first half of this year was 707.1 billion won, down 12.5% from the same period a year earlier, and operating loss for the same period widened by 18.2 billion won to 49.1 billion won. SSG.com has posted losses for seven consecutive years.
Although the breach of trust charge that SK Group cited as the reason for giving up 11Street's call option is expected to be abolished by the ruling party, there remain reasons for a company to refrain from exercising a call option.
A capital markets specialist lawyer said, "With the Commercial Act amended to strengthen the duty of loyalty to shareholders, it has become very difficult for boards of directors to make decisions that could cause losses to corporations and shareholders," adding, "If SSG.com's performance and financial condition do not improve significantly from now, Shinsegae Group will have no choice but to be reluctant to exercise a call option at a high valuation like SK did."