이 기사는 2019년 12월 13일 08:00 thebell 에 표출된 기사입니다.

South Korea’s leading mobile game maker Netmarble is exploring the possibility of issuing corporate bonds for the first time to help finance its acquisition of Woongjin Coway.

According to mergers and acquisitions (M&A) industry sources on Tuesday, Netmarble is reviewing the possibility of selling corporate bonds, tapping institutional investors. The game maker hasn’t decided the total issue size yet. Netmarble has contacted institutional investors including securities firms, insurance companies and pension funds and weighed options to finance the 1.8 trillion won worth deal, including borrowing from banks, acquisition financing and corporate bond issuance.

The cash-rich Netmarble is expected to use its cash holdings and loans to finance the acquisition. Initially it was widely expected that the game maker might pay the total amount with its own money.

However, with the company holding cash and cash equivalents worth roughly 1.25 trillion won, it needs to raise more money. According to Netmarble’s consolidated financial statement, the company holds 2.3 trillion won in cash and cash equivalents, but it is unlikely that the company rakes in all the money from overseas subsidiaries to finance the acquisition.

Accordingly, Netmarble has received proposals on acquisition financing and corporate bond issuance from banks and brokerages. The game maker is comparing bond issue and acquisition financing to secure optimal acquisition financing structure. Netmarble may create a special purpose company (SPC) to takeover Coway. If this is the case, it will be the SPC who will borrow money from financial firms.

If Netmarble actually sell corporate bonds, it will be the first time in the company’s history. The first step it should take when issuing corporate bonds is to receive credit ratings from credit rating agencies. Netmarble hasn’t earned ratings from credit rating agencies yet. Market expects the game maker to obtain a high credit rating considering its stable profit-making business structure and financial status. If the company gets higher ratings, it could sell debts at a lower interest rate.

“Netmarble is expected to get at least ‘A’ rating. If it earns a higher rating, it will be able to issue corporate bonds at a lower rate,” said a IB industry source. According to Netmarble’s consolidated financial statement as of the end of September, the company has 1.25 trillion won in cash and cash equivalents. The debt-free game maker recorded 950 billion won of sales and 61.3 billion won of operating profit during the same period.

Netmarble has been chosen as the preferred bidder to buy the country's largest home appliance rental service provider Coway in October. Netmarble will acquire a 25.08 percent stake in Coway. The game maker reportedly offered some 1.83 trillion won to take over the rental service provider. There have been delays on the deal due to some unexpected factors like strikes by Coway’s union workers. It is said that two parties are currently in the negotiation process to sign a share purchase agreement (SPA) in the near future.

(By reporters Kim Hye-ran and Kim Byung-yoon)