TMON, WeMakePrice get go-ahead for stalking horse bid

Embattled e-commerce platforms TMON and WeMakePrice were given court approval to seek a new buyer in the form of a stalking horse bid.

TMON headquarters in southern Seoul [YONHAP]

A Seoul court has approved the process to find a new owner for e-commerce platforms TMON and WeMakePrice, which have been undergoing court-led rehabilitation since early September after failing to make payments to vendors using their platforms, industry sources said Wednesday.

The Seoul Bankruptcy Court has selected accounting firm EY Hanyoung as the lead manager for the process to sell the platforms to help resolve the massive payment delays, a person familiar with the matter told Yonhap News Agency over the phone.

TMON and WeMakePrice are separately put up for sale, but they can be sold together, the source added.

The process will be carried out in the form of a stalking horse bid, in which a preliminary bidder suggests a price for the platforms ahead of a formal auction and other bidders submit their prices, the person said.

A higher bid would compel the preliminary bidder to decide whether to take over the platforms at the new price.

EY Hanyoung plans to receive letters of intent from companies interested in the platforms by Nov. 18 and aims to select a preferred bidder on Dec. 11, the source said.

Under the court-led rehabilitation program, the accounting firm is scheduled to evaluate the two platforms' going concern value and their liquidation value by Nov. 29.

If the companies' going concern value is bigger than their liquidation value, TMON and WeMakePrice are expected to submit detailed rehabilitation plans to the court by Dec. 27.

"The push for a merger and acquisition before the court's decision on whether to approve rehabilitation plans for the platforms or not is aimed at making delayed payments to vendors as quickly as possible," the source said.

In late July, TMON and WeMakePrice filed for corporate rehabilitation with the bankruptcy court.

The payment delays by the two platforms prompted local financial authorities to launch an investigation. The authorities estimated there is more than 1.5 trillion won (US$1.1 billion) in unpaid bills and other liquidity issues regarding the incident.

The liquidity crisis was reportedly caused by aggressive merger deals by their owner, Singapore-based Qoo10.

Yonhap