PEF to recoup investment from money-losing Discovery of Play

2023.09.20 14:11:01 | 2023.09.20 14:30:44

Woongjin Group office building.이미지 확대

Woongjin Group office building.

A mid-sized Korean private equity fund (PEF) manager that invested in Woongjin Group’s new mobile platform, Discovery of Play, will be able to fully recover its investment after three years.

According to sources on Tuesday, Woongjin Thinkbig passed a resolution through its board of directors to acquire 400,000 shares of redeemable convertible preferred shares (RCPS) from its namesake subsidiary at a price of 23.8 billion won ($18 million).

The RCPS was issued for the Woori-Cue Corporate Financial Stability PEF, which was jointly formed by Woori Private Equity and Cue Capital three years ago.

In 2020, Woongjin Thinkbig had attracted 20 billion won in investment after it split off Discovery of Play as a dedicated activity booking platform for children. However, financial investors exercised put options this month, requiring the return of their investments.

Discovery of Play began as Woongjin Thinkbig’s children platform business unit and was officially launched in April 2019 as the platform of today. In May 2020, it underwent a spin-off to become a wholly-owned subsidiary of Woongjin Thinkbig.

The RCPS has posed a significant financial burden on the company, especially given its relatively low revenue and the associated interest costs.

By Cho Yun-hee and Minu Kim

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