Kakao Mobility Shakes Off Private Equity Sale Burden... Focuses on Social Contribution Activities

[Asia Economy Reporter Kang Nahum] Kakao Mobility has completely freed itself from the burden of being sold to private equity funds. MBK Partners, which had shown interest in acquiring shares of Kakao Mobility, has completely withdrawn from the bidding process. Kakao Mobility plans to focus on social contribution activities for the time being to restore its corporate image and develop the mobility ecosystem.

According to industry sources on the 23rd, MBK Partners has reportedly halted all work related to acquiring shares of Kakao Mobility. After Kakao withdrew the sale of its Kakao Mobility shares, MBK continued discussions with financial investors (FIs) such as the TPG consortium and the Carlyle Group, but internally concluded that holding shares without management rights has little investment value.

What remains is the financial burden on Kakao and Kakao Mobility. The parent company Kakao is known to have made an agreement with private equity funds like TPG to attract investment and to monetize the investment shares through an IPO or similar within a certain period after the investment. TPG, which began investing in 2017, has already reached the deadline for fund recovery.

Therefore, the possibility of Kakao going public (IPO) again has increased. As of the end of last year, Kakao Mobility’s shares are composed of Kakao 57.6%, TPG 29.0%, and Carlyle 6.2%. The key issue is whether the initially set “8 trillion won” valuation by Kakao will be recognized. Kakao Mobility recorded an operating loss of 13 billion won in 2020 but barely turned a profit with an operating income of 12.6 billion won last year.

The internal atmosphere at Kakao Mobility is calm. Rather than being swayed by the share sale issue, the company plans to focus on social contribution activities based on the previously prepared win-win plan. Kakao Mobility, which had established a 50 billion won win-win fund, is currently improving operating conditions by immediately compensating all KakaoT brand taxi drivers for damages incurred during roaming sales, stopping, and waiting within the coverage scope. For designated driver drivers, free health checkups, “night service visits to shelters,” counseling and education to relieve work-related illnesses and stress are also underway.

A Kakao Mobility official said, “Right now, our priority is to help the entire mobility ecosystem grow together,” adding, “At the same time, we will continue investing in future mobility and accelerate overseas expansion to become a leading global mobility platform.”

This content was produced with the assistance of AI translation services.