Krafton IPO Halted...FSS Requests Amendment of Securities Registration Statement

[Asia Economy Reporter Park Jihwan] The financial authorities have requested Krafton, a game company considered the 'big fish' in this year's second half initial public offerings (IPO), to supplement the explanation for the basis of its offering price calculation and to amend its securities registration statement. As a result, the listing schedule next month is expected to face inevitable delays.

On the 25th, the Financial Supervisory Service (FSS) announced that it requested Krafton to submit an amended registration statement following the review of its securities registration statement. The FSS stated, "This applies when the securities registration statement does not properly conform to the required format, or when there are false statements or omissions regarding important matters in the registration statement, or when the description or disclosure of important matters is unclear, thereby hindering investors' reasonable investment decisions or causing significant misunderstandings to investors."

The effectiveness of the securities registration statement is suspended from the time the amendment request is made. If the amended registration statement is not submitted within three months, the securities registration statement will be considered withdrawn.

There are also expectations that Krafton's offering price may be partially lowered. Krafton's desired offering price per share ranges from 458,000 KRW to 557,000 KRW. The offering funds are estimated to be between 4.6 trillion KRW and up to 5.6 trillion KRW. Krafton's price-to-earnings ratio (PER) is 45.2 times, which is the average of seven selected comparable companies and is higher than Nexon's PER of 12 times.

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