KOSDAQ-listed Sungho Electronics and its parent company Seoryong Electronics will acquire Fintech corporation Finger. Unlisted Seoryong Electronics and Sungho Electronics will inject 90 billion won, and Pantos Holdings, well known on the KOSDAQ market, will join as a financial investor (FI), enabling Finger to secure 110 billion won in funding.
On news that a large sum of money nearly matching its market capitalization would flow in, Finger shares surged for a second straight day. In particular, it is seen as investor sentiment being buoyed by the point that Sungho Electronics, which recently drew attention with aggressive mergers and acquisitions (M&A), will become the de facto new owner.
In the industry, there is also talk that after acquiring Finger, Seoryong Electronics plans to hire outside experts from AMD and Goldman Sachs to expand its global Fintech business.
However, criticism has been raised that because Seoryong Electronics' financial condition is weak, this acquisition is similar in structure to a kind of no-capital M&A. Aggressive expansion without the acquiring party's financial capacity to back it could lead to overhang (potential sell orders) or funding risks down the road, requiring investors to exercise caution.
Seoryong Electronics, Sungho Electronics, Moonpay, and Pantos Holdings said they signed a deal to invest about 110 billion won in Finger. Specifically, Seoryong Electronics will participate in the company's planned paid-in capital increase of 30 billion won and be allotted new shares at 11,498 won per share, and it plans to acquire 38.5 billion won of the 50 billion won in convertible bonds (CB) that the company will issue. The remaining 11.5 billion won in CBs will be acquired by Moonpay Korea, a virtual asset (cryptocurrency) payment platform, and others.
Finger also decided to issue 30 billion won in bonds with warrants, with warrants exercisable from May next year at 12,509 won per share; Sungho Electronics will acquire 20 billion won and Pantos Holdings 10 billion won.
Seoryong Electronics will become the new largest shareholder of Finger when it is allotted new shares through the paid-in capital increase and converts the CBs into stock. Seoryong Electronics is also said to be acquiring about 240,000 existing shares held by Vice Chairman Park Min-su, Finger's current largest shareholder.
This acquisition has put the aggressive M&A led by Sungho Electronics CEO Park Sung-jae on the chopping block. The point is that Seoryong Electronics' financial condition is insufficient to handle this acquisition, which requires a large amount of funds.
Seoryong Electronics is a private company wholly owned by Park Sung-jae, the eldest son of Sungho Electronics founder Chairman Park Hyun-nam. As of the end of last year, current assets (22.8 billion won) fell far short of current liabilities (59.7 billion won). This means it is difficult to handle a large acquisition with its own cash generation alone.
Although Seoryong Electronics' total equity amounts to 226.4 billion won, most of it is the valuation of its equity in Sungho Electronics (223.2 billion won). Sungho Electronics' total equity increased from 2.6 billion won at the end of 2024 to 226.4 billion won at the end of 2025, driven by a surge in Sungho Electronics' share price.
As recently as early Dec., Sungho Electronics' share price was around 2,000 won, but it is now moving around 50,000 won. It spiked after the company released the acquisition of optical transceiver equipment maker ADS Tech. News that ADS Tech supplies products to Mellanox, a subsidiary of Nvidia, acted as a significant tailwind for Sungho Electronics' share price.
Sungho Electronics acquired 87.5% of ADS Tech's shares (100% of the total number of issued shares excluding treasury shares) for 280 billion won, and to raise the funds needed for the acquisition, it carried out a paid-in capital increase and issued CBs and BWs.