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
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.
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.