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    3659   JP3758190007

NEXON CO., LTD.

(3659)
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Delayed Japan Exchange  -  05/20 02:00:00 am EDT
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NEXON : Notice of Change in Equity Method Affiliate (Share Transfer) and Expectation of Recording Extraordinary Gain

01/19/2022 | 07:46pm EDT

January 20, 2022

Name of Company:

NEXON Co., Ltd.

Representative:

Owen Mahoney, Representative Director,

President and Chief Executive Officer

(Stock Code: 3659, TSE First Section)

Contact:

Shiro Uemura, Representative Director and Chief

Financial Officer

Telephone:

03-6629-5318

Notice of Change in Equity Method Affiliate (Share Transfer)

and Expectation of Recording Extraordinary Gain

NEXON Co., Ltd. ("Nexon") announced that the transfer of all of the shares of Six Waves Inc. (Nexon's equity method affiliate) owned by Nexon to Stillfront Group AB (publ) was approved by its Board of Directors on the night of January 19, 2022. The details are as follows.

Furthermore, Six Waves Inc. will be removed from Nexon's equity method affiliates due to this share transfer.

1. Reason for the share transfer

In 2011, Nexon made a strategic investment in Six Waves Inc. for the purpose of aggressively expanding its domain of business into the social gaming field. The investment at the time was made with an expectation that the partnership will generate synergy between Six Waves Inc.'s track record in social games and Nexon's track record in the operations of popular online games and its expertise in the microtransaction model of monetization. Since then, Nexon and Six Waves Inc. have not achieved the business results initially expected and the investment came to be positioned as pure investment at Nexon.

In this situation, Six Waves Inc. came to us with a request that they wanted us to sell the shares in our holding to Stillfront Group AB (publ) for their vision of further growth in the future. Upon reviewing the matter, Nexon agreed with Six Waves Inc.'s wishes and decided to transfer all of the company's shares owned by Nexon to Stillfront Group AB (publ).

1

2. Overview of the equity method affiliate subject to change (as of September 30, 2021)

(1)

Name

Six Waves Inc.

(2)

Location

Hong Kong Special Administrative Region, China

(3)

Name and title of the

Chow Bong Leong, Arthur, CEO

representative

(4)

Description of business

Mobile game development and service business

(5)

Capital stock

USD 44,677 thousand

(6)

Date of establishment

December 3, 2008

Major shareholders and

NEXON Co., Ltd. 34.8%; Ng Lok Shun, Rex 20.5%; Chow Bong Leong,

(7)

their shareholding

Arthur 13.2%

ratios

Capital relationship

Nexon owns 34.8% of outstanding shares of the

company

The listed company's

1 director and 1 employee of Nexon's

(8)

relationship with the

Personal relationship

consolidated subsidiary concurrently serve as the

company

company's directors

Transactional relationship

Not applicable

(9)

Results of operations and financial position of the company for the last three years (Note)

Fiscal year

FY2018

FY2019

FY2020

Total equity

USD 12,512 thousand

USD 20,847 thousand

USD 31,558 thousand

JPY 1,439 million

JPY 2,398 million

JPY 3,630 million

Total assets

USD 29,533 thousand

USD 39,564 thousand

USD 48,900 thousand

JPY 3,397 million

JPY 4,551 million

JPY 5,625 million

Net assets per share

USD 0.12

USD 0.20

USD 0.44

JPY 13.65

JPY 22.74

JPY 50.74

Revenue

USD 64,878 thousand

USD 91,600 thousand

USD 137,410 thousand

JPY 7,462 million

JPY 10,536 million

JPY 15,805 million

Operating income (loss)

(USD 6,944 thousand)

USD 4,591 thousand

USD 32,105 thousand

(JPY 799 million)

JPY 528 million

JPY 3,693 million

Net income (loss)

(USD 7,152 thousand)

USD 8,356 thousand

USD 33,635 thousand

(JPY 823 million)

JPY 961 million

JPY 3,869 million

Net income (loss) per share

(USD 0.07)

USD 0.08

USD 0.33

(JPY 7.80)

JPY 9.12

JPY 37.85

(Note)

These are financial numbers of the company at the time of equity method application. Therefore,

they may differ from the financial numbers of the company finalized by closing of accounts. The

foreign exchange rate presumes a rate of USD 1 = JPY 115.02 (as of December 31, 2021).

2

3. Overview of the counterparty of share transfer (as of November 30, 2021)

(1)

Name

Stillfront Group AB (publ)

(2)

Location

Stockholm, Sweden

(3)

Name and

title of

the

Jörgen Larsson, CEO

representative

(4)

Description of business

Game development and service business

(5)

Capital stock

SEK 26 million (about JPY 326 million)

(6)

Date of establishment

November 2, 2006

(7)

Major shareholders and

Laureus Capital GmbH 12.0%, Swedbank Robur Funds 9.2%, SEB Funds

their shareholding ratios

6.1%, Handelsbanken Funds 4.3%, AMF Pension & Funds 3.6%

Capital relationship

Not applicable

The listed

company's

Personal relationship

Not applicable

(8)

relationship

with

the

Transactional

Not applicable

company

relationship

Related party situation

Not applicable

4. Number of shares transferred, transfer price and status of shares owned before and after the transfer

(1)

Number of shares owned

26,500,000 shares

(Number of voting rights: 26,500,000)

before the transfer

(Voting rights ratio: 34.8%)

(2)

Number of shares

26,500,000 shares

transferred

(Number of voting rights: 26,500,000)

(3)

Transfer price

About USD 93 million (about JPY 10,674 million) (Note)

(4)

Number of shares owned

shares

(Number of voting rights: -)

after the transfer

(Voting rights ratio: -%)

(Note) The transfer price will be adjusted based on factors including the assets and liabilities of Six

Waves Inc. on the effective date of the share transfer.

5. Timeline

(1)

Resolution of the Board

January 19, 2022

of Directors

(2)

Date of share transfer

January 19, 2022

agreement

(3)

Date of share transfer

January 31, 2022 (scheduled)

3

6. Future Outlook

Due to this share transfer, Nexon will record a gain on sales of investments in subsidiaries and affiliates in its standalone accounting for the year ending December 31, 2022 and, in its consolidated accounting for the three months ending March 31, 2022, a gain on sales of investments in affiliates under finance income upon making any adjustment necessary for consolidated accounting.

Furthermore, the impact of this share transfer on the consolidated results for the three months ending March 31, 2022 is currently under examination and we will promptly make an announcement if any impact that should be disclosed is found.

4

Disclaimer

Nexon Co. Ltd. published this content on 20 January 2022 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 20 January 2022 00:45:09 UTC.


© Publicnow 2022
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Financials
Sales 2022 348 B 2 722 M 2 722 M
Net income 2022 107 B 834 M 834 M
Net cash 2022 613 B 4 794 M 4 794 M
P/E ratio 2022 25,8x
Yield 2022 0,26%
Capitalization 2 727 B 21 330 M 21 330 M
EV / Sales 2022 6,07x
EV / Sales 2023 4,99x
Nbr of Employees -
Free-Float 51,5%
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Number of Analysts 11
Last Close Price 3 080,00 JPY
Average target price 3 190,64 JPY
Spread / Average Target 3,59%
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Managers and Directors
Owen Mahoney President & Representative Director
Shiro Uemura CFO, Representative Director & GM-Administration
Satoshi Honda Independent Outside Director
Shiro Kuniya Independent Outside Director
Patrick Söderlund Director
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