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Korbit raises $75 mil from SK Square at $210 mil valuation NXC's Korbit equity value plummets to $2.9 mil in late 2019

Translated by Kim So-in 공개 2021-12-01 08:12:47

이 기사는 2021년 12월 01일 08:10 더벨 유료페이지에 표출된 기사입니다.

NXC’s cryptocurrency exchange Korbit has raised funds from an external investor for the first time in four years at a valuation of 250 billion won ($210 million), after suffering a valuation slump.

SK Square will invest 90 billion won in Korbit to become its second-largest shareholder with a 35% stake, Korbit said on Monday. NXC, the holding company of Korean online gaming giant Nexon, will retain the position as the largest shareholder, though its stake will be diluted to around 48%.

SK Square is to purchase shares worth 30 billion won from existing shareholders, most of which are presumably owned by Tony Lyu, former CEO and co-founder of the cryptocurrency exchange. The remaining 60 billion won will be invested by acquiring new shares.

Assuming that SK Square will buy new and old shares at the same price, the company has valued Korbit at about 257 billion won. This will give the largest shareholder NXC a hefty gain despite its stock dilution. SK Square has valued a 35% stake for 90 billion won and this is almost the same as the amount NXC paid to buy 63% of Korbit – 91.3 billion won - four years ago.

The cryptocurrency exchange’s valuation peaked in 2017 when it was acquired by NXC. Korbit delivered strong financial performance amid the booming domestic virtual asset market, which made founder of Nexon and chairman of NXC Kim Jung-ju value the company at 100 billion won.

According to NXC’s audit report, NXC paid approximately 128.5 billion won to Korbit as a transfer price as of the end of 2017. NXC had held a minority stake in Korbit before the crypto exchange became the NXC’s subsidiary in September 2017. NXC paid 128.5 billion won in cash to acquire a combined 83% stake in Korbit, meaning it had valued Korbit at 155 billion won.

The value of Korbit, however, has plummeted right after the acquisition due to the depressed virtual asset market. Korbit, which generated a net profit of 69.7 billion won in 2017, delivered a combined loss of 58.7 billion won in 2018 and 2019. Its equity capital dropped from 73.8 billion won to 15.6 billion won, and retained earnings were only 7.5 billion won during the same period.

With losses growing, the value of Korbit’s stake owned by NXC was impaired. With a 77.9 billion won impairment loss recognized in 2018, the value of NXC’s stake in Korbit decreased by 80% from 91.3 billion won to 18.5 billion won in just a year. In 2019, an impairment loss of 14.7 billion won was recognized, dragging down the equity value to 3.5 billion won.

The value of Korbit has sharply increased this year thanks to a recovery in the virtual asset industry, led by the country’s top four cryptocurrency exchanges. Upbit, South Korea’s largest cryptocurrency exchange, generated a net profit of more than 2 trillion won in the first nine months of this year. The third-largest player CoinOne delivered a net profit of 90 billion won in the first half alone. Based on its average trading volume, Korbit is estimated to have generated a profit of tens of billions of won. (Reporting by Sang-woo Seong)
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