이 기사는 2021년 04월 20일 07:46 thebell 에 표출된 기사입니다.

South Korea’s gaming company Wemade is considering bidding for the nation’s crypto exchange Bithumb Korea, industry sources said on Friday.

NXC, the holding company of game developer Nexon, JP Morgan, and Morgan Stanley were considered potential buyers, but talks with the crypto exchange had made little progress. Wemade’s participation in the race for Bithumb is widely known in the gaming and blockchain industries while Wemade was refraining from commenting on that.

“Wemade CEO Chang Hyun-guk has shown a continued interest in taking over a crypto exchange since the company started its blockchain business last year,” said an industry source. “It could create synergy with its existing blockchain business and generate additional revenue.”

If the negotiations go through, Wemade is expected to take over shares owned by Lee Jung-hoon, who chairs the boards of Bithumb Korea and Bithumb Holdings, which are expected to fetch between 500 billion won ($447 million) to 700 billion won. NXC had offered an acquisition price of 500 billion won when it was in talks with the crypto exchange.

Wemade is unlikely to take over Bithumb on its own given its financial status. The gaming company had cash and cash equivalents of 42 billion won at the end of 2020, with current assets of 146 billion won and total assets of 323.3 billion won. The possible acquisition price of 500 billion won is larger than Wemade’s total assets.

Wemade’s financial soundness, however, is positive. The company’s debt ratio was 11.1% at the end of 2020, according to data from the Korea Ratings. It virtually has no borrowing as it had negative net borrowing, with dependence on borrowings and dependence on short-term borrowings of only 0.3% and 0.2%, respectively, in 2020. Its dependence on borrowings had been 0% until 2018.

Its free cash flow and internal cash flow are both in the negative territories. It is difficult for the company to cover financial expenses incurred regularly with its own cash flows if any borrowings are made. The company’s earnings before interest and taxes/total financial expenses multiple was negative 382.8 times in 2020 although its total financial expenses were insignificant.

Wemade will likely have to form a consortium with several companies to join the race, but nothing is known yet.

The gaming company will also have to solve an issue of Bithumb’s complicated stake structure. Bithumb Korea, which operates Bithumb, is 74.1% owned by Bithumb Holdings. Bithumb Holdings’ current shareholders include Vidente (34%) DAA (30%), and BTHMB Holdings (10%).

DAA’s largest shareholder is Bithumb Holdings with a 48.53% stake and Bithumb Holdings’ largest shareholder is SG Brain Technology Consulting with a 95.8% stake. Lee is virtually the largest shareholder of Bithumb Korea as it owns 49% of SG Brain Technology Consulting. (Reporting by Sang-woo Sung)