Ant-Backed Kakao Pay Told to Revise Prospectus For Korea IPO

Sohee Kim

19 Jul 2021, 05:26 AM IST

(Bloomberg) -- Kakao Pay Corp., South Korea’s largest online payment service with 36 million users, was asked by Korean regulators to revise the prospectus for its upcoming initial public offering, the second time in recent weeks that authorities have intervened in a proposed listing.

The Pangyo-based fintech company had originally sought to raise as much as 1.63 trillion won ($1.4 billion) in an initial public offering in Seoul, following blockbuster IPO filings from Kakao Bank and Krafton Inc. last month. It had originally planned to sell 17 million new shares at 63,000 won to 96,000 won apiece, which would have given it a market capitalization exceeding $11 billion at the top of the range. The firm, backed by Jack Ma’s Ant Group Co., had been scheduled to debut on August 12.

South Korean regulators had earlier asked Krafton to revise its filing documents, prompting the company behind the hit mobile game PlayerUnknown’s Battlegrounds to abandon its bid for the country’s largest-ever coming-out party. Krafton on July 1 cut its targeted IPO to 4.3 trillion won ($3.8 billion), down from an earlier target of 5.6 trillion won.

The intervention on Friday comes as Korean companies head for a record year of floats. Kakao Mobility and Kakao Entertainment -- affiliates of Kakao Pay’s parent Kakao Corp. -- are also considering listings next year.

The Financial Supervisory Service didn’t provide details in its statement about why it was asking Kakao Pay to revise its prospectus. A spokesman for the watchdog declined to comment, while a Kakao Pay spokeswoman couldn’t immediately comment.

Kakao Pay’s revenue more than doubled to 284 billion won last year, while it cut net losses by 61% to 25 billion won. The main underwriters for its IPO -- Samsung Securities Co., JPMorgan Chase & Co. as well as Goldman Sachs Group Inc. -- had valued the firm by comparing against PayPal Holdings Inc., Square Inc. and Brazil’s Pagseguro Digital Ltd.

In Krafton’s case, underwriters had initially included non-gaming firms such as Walt Disney Co. and Warner Music Group Corp. in its pool of valuation peers, drawing criticism from local media. Both were removed in its revised filing, along with some other foreign companies.