Mesh Korea, operator of delivery service 'Bureung', aims to raise 40 billion KRW in investment

Busan Mid-sized Construction Company Receives Investment Commitment from IT Firm
Funds Secured for Operating Capital and OK Capital Debt Repayment

[Asia Economy Reporter Kwangho Lee] Mesh Korea, the operator of the delivery agency ‘Boorung,’ is seeking new investment. Attention is focused on whether it will find a way out by securing external funds amid the crisis.

According to the investment banking (IB) industry on the 28th, Mesh Korea is in talks to raise 40 billion KRW in investment. It has secured Letters of Commitment (LOC) from a mid-sized construction company in Busan and an IT company. They are strategic investors (SI) expecting business synergy effects with Mesh Korea.

Mesh Korea plans to use 4 billion KRW out of the 40 billion KRW as operating funds. The goal is to secure 2 billion KRW this month and 2 billion KRW in February next year. The remaining 36 billion KRW will be used for debt repayment. Previously, Mesh Korea failed to repay the 36 billion KRW borrowed from OK Capital by the maturity date.

Through a debt transfer contract, it plans to repay the debt to OK Capital by February next year. It will pay a contract deposit of 3.6 billion KRW this month and intends to repay the remaining debt in full before February, when the Autonomous Restructuring Support program (ARS), a type of corporate rehabilitation procedure, ends.

Mesh Korea applied for ARS at the Seoul Bankruptcy Court last month. ARS is a system that allows the court to give the company and creditors time to negotiate before starting formal rehabilitation procedures. If an agreement is reached, the company withdraws the rehabilitation; if negotiations fail, the rehabilitation process proceeds as planned.

Subsequently, OK Capital, a creditor of Mesh Korea, applied for a P-Plan for Mesh Korea through the law firm Bae, Kim & Lee. The P-Plan is a method of conducting rehabilitation under court supervision, where the rehabilitation plan is created through negotiations between creditors and the debtor company.

From Mesh Korea’s perspective, ARS is a better option than the P-Plan. If credit rating drops due to the P-Plan rehabilitation procedure, it is highly likely to affect contract renewals with client companies in the first quarter of next year. Through ARS, urgent operating funds can be raised, and normal business operations can continue.

Yoo Jung-beom, chairman of Mesh Korea, said, “We prefer investment attraction over selling management rights,” adding, “Strategic investors such as Naver, GS Retail, Hyundai Motor, as well as financial investors (FI) like Solbon Investment and Woori Technology Investment share the same stance.”

Mesh Korea provides business-to-business (B2B) services delivering goods from companies to companies or stores using motorcycles and trucks. It has grown steadily by attracting investments from venture capital (VC) and others over several years. However, since August, it has faced a crisis starting with deferred office rent payments, followed by workforce restructuring and failed investment attraction.

Meanwhile, there is also interest in some FI investors in Mesh Korea. KB Investment acquired a 4.42% stake in Mesh Korea from SK Networks last year for 17 billion KRW. Despite expected significant losses at present, KB Investment recently transferred the investment officer who led the investment at that time to an administrative department. Moving investment personnel to administrative departments is a very unusual move.

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