TMON, WeMakePrice face backlash from creditors over restructuring plans

WeMakePrice CEO Ryu Hwa-hyun(left) and TMON CEO Ryu Kwang-jin leave Seoul Bankruptcy Court after a meeting on rehabilitation proceedings on the 13th. [Photo by Joint Press Corps]

TMON and WeMakePrice encountered opposition from key stakeholders during the “Recovery Procedure Council” held on Tuesday, as creditors rejected the self-rescue plans proposed by the two online marketplaces.

Sellers who are owed payments have expressed strong disapproval, arguing that the plans are merely tactics to buy time. The council plans to reconvene on August 30 after further discussions.

The Seoul Bankruptcy Court’s Rehabilitation Division 2 held the council meeting at 3 p.m., where the two companies presented their self-rescue proposals and requested cooperation from attendees. According to the disclosed repayment plans, both companies intend to convert all related-party debts into equity and then carry out a capital reduction.

For unsettled payments to sellers, two options were proposed: installment repayment or partial repayment followed by debt-for-equity conversion. Additionally, the companies proposed prioritizing repayment to a total of 100,000 small creditors, with 40,000 from TMON and 60,000 from WeMakePrice.

Other measures discussed included the introduction of escrow accounts, shortening the payment cycle by implementing a “payment one day after delivery” system, workforce restructuring, reducing rental expenses, and improving profitability by focusing on higher margins. The companies also outlined a plan to proceed with an autonomous restructuring support procedure, contingent on securing investors. This plan involves receiving letters of intent (LOIs) from potential investors, conducting financial due diligence, and then entering into conditional investment agreements.

However, creditors expressed concerns that these proposals are not fundamental solutions but rather temporary fixes. Regarding the priority repayment for 100,000 small creditors, the creditors’ group emphasized that the early normalization of the companies is of greater importance, urging caution in the approach.

Following the council meeting, WeMakePrice CEO Ryu Hwa-hyun said, “We plan to secure investors by August 30 and present them to the court.”