Kakao Games: "No Set Schedule for Lionheart IPO... Prioritizing Next Project Development"

[Asia Economy Reporter Seungjin Lee] Kakao Games has drawn a line regarding Lionheart Studio's withdrawal of its IPO and plans to reattempt listing, stating that it is "prioritizing the development of its next project."

On the 2nd, during the Q3 2022 earnings conference call, Kakao Games CEO Jo Gye-hyun said, "Considering various factors such as the negative macro environment affecting the valuation of listed companies and the weakened investment sentiment, we withdrew the planned public offering process," adding, "No decisions have been made regarding the listing or its schedule."

CEO Jo explained, "In such circumstances, both companies are discussing prioritizing the development of core content for Odin, its global expansion, and the development of the next project."

Lionheart Studio, a subsidiary of Kakao Games that developed the MMORPG 'Odin: Valhalla Rising,' withdrew its securities registration statement last month and postponed its IPO schedule.

Inside and outside the industry, there has been speculation about the possibility of reattempting the listing next year, citing the promise of stock purchase rights (put options) to key executives, including Lionheart Studio CEO Kim Jae-young.

Regarding this, Kakao Games Chief Financial Officer (CFO) Cho Hyuk-min emphasized, "The Lionheart option contract conditions were carefully reviewed at the time of negotiation to ensure that the value of Kakao Games shareholders would not be impaired, so the contract details are somewhat complex. Given the withdrawal of the public offering process, it is clear that the options cannot currently be exercised."

He continued, "Specifically, the monetary conditions are structured to be determined based on market conditions and future performance, so there have been various market estimates assuming option exercises based on the final acquisition valuation or recent valuations," adding, "At this point, it is inappropriate, and making modifications related to such options would be meaningless."

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