TMON, WeMakePrice aim for normalization by end of 2025

[Photo by Yonhap]

South Korean e-commerce platforms TMON Inc. and WeMakePrice Inc., which are currently undergoing an Autonomous Restructuring Support (ARS) program, submitted their debt repayment and recovery plan to the court on Monday.

The self-developed plan, which was submitted to the Seoul Bankruptcy Court, details how the companies will attract investment via a restructuring fund to repay creditors, including vendors. The companies aim to normalize operations by the end of 2025 by securing 200 billion won ($145.9 million) in funding, with plans to eventually resell within the next three years.

The plan also prioritizes the repayment of small business owners‘ debts to reduce the number of creditors. WeMakePrice CEO Ryu Hwa-hyeon told the Maeil Business Newspaper that the company will use up to 25 billion won to repay small business owners.

TMON and WeMakePrice are reportedly in contact with private equity funds to attract investment, but no investors have been secured yet.

Qoo10 Group CEO Ku Young-bae’s proposal to create a platform to merge TMON and WeMakePrice is not included in the plan submitted to the court. Ku proposed creating a new company by merging the two companies, thus allowing the victims to participate in the new company’s management in the form of shareholder cooperatives.

The two companies’ plan is expected to be unveiled on Tuesday during the meeting of the rehabilitation council, which will be attended by relevant government agencies and members of the creditors‘ committee. The duo will seek cooperation while verifying the feasibility and viability of their plan during the meeting, which will be held in private, with details to be announced after the meeting.

Industry insiders criticize the plan as unrealistic, and doubt the likelihood of finding investors willing to cover the debt, which is estimated over 1 trillion won.

“No private equity fund would invest several hundred billion won to revive a company with serious capital impairment,” an industry insider said, adding that there is no possibility of realizing a profit.