TMON vies for M&A with aim to return to business in October

TMON CEO Ryu Gwang-jin said that the troubled e-commerce platform will resume normal operations next month as the company pushes for a merger.

TMON CEO Ryu Gwang-jin, right, talks to reporters in front of the Seoul Bankrupty Court in southern Seoul on Tuesday after the court gave Qoo-10 owned e-commerce platforms TMON and WeMakePrice the green light to proceed with corporate rehabilitation. [YONHAP]

TMON CEO Ryu Gwang-jin said on Wednesday that the e-commerce platform will resume normal operations next month whilst continuing to pursue mergers, following the recent approval to proceed with court receivership.

TMON will implement a new payment system that involves an escrow — a third party that holds and disburses money — at the start of October before starting operations, Ryu said in a statement Wednesday.

The platform’s operations hit a roadblock in July, as payment gateways pulled their services from TMON after the cash-strapped marketplace failed to pay its sellers.

He added that a team to manage finances and funding as well as one to manage technology and development for the marketplace were created last month to smooth operations for the company’s independent management outside of its ailing parent company, Qoo10.

TMON is in discussion with two companies for a merger and acquisition (M&A), the CEO said.

“We have been hiring managers to take care of tasks related to the rehabilitation proceedings and operations for the platform, and have been pursuing an M&A that will be approved by creditors before the court approves our corporate rehabilitation plan,” he said.

“We expect the M&A to proceed more quickly when the size of the deal is determined after results of the investigative audit come out.”

Sellers and customers affected by TMON and WeMakePrice's liquidty crisis launch a protest against the e-commerce platforms in front of the National Assembly building in Yeouido, western Seoul, on Sept. 8. [YONHAP]

The Seoul Bankruptcy Court gave the greenlight to Qoo10-owned platforms TMON and WeMakePrice to start corporate rehabilitation proceedings on Tuesday.

TMON will have to submit a list of creditors to the court by Oct. 10. Ernst & Young Hanyoung, the auditor overseeing the investigation, will determine TMON’s liquidation value and going concern value in a report by Nov. 29. The deadline for the platform’s rehabilitation plan is Dec. 27.

The court will then review the plan and rule on its acceptability. Should the court decline the company's rehabilitation plan, for reasons such as insufficient funds to repay liabilities, the marketplace could have to file for bankruptcy.

BY KIM JU-YEON [kim.juyeon2@joongang.co.kr]