[HanKyung] Cube Entertainment heads for listing effort despite lower worth…Why?

사진/ 변성현 기자

Cube Entertainment that had voluntarily withdrawn their listing application, has opted to be listed again, after a short period of three months since the withdrawal.

On 31st October, according to Financial Supervisory Service, IHQ has announced their plans on the 27th October, that subsidiary Cube Entertainment will be merging with WooriSPAC2.

The merger will be in a ratio of 1 to 3.4626, with WooriSPAC2 worth 2301 Won per share and Cube Entertainment worth 7967 Won per share.

Cube Entertainment is a label company famous for housing singers Rain, 4minute, BEAST and many more artists. Although it was announced in May that they will head to be listed on the stock market, the application was eventually retracted two months later in July.

According to representatives of Cube Entertainment, Sewol incident has caused a staggering situation in the second quarter, and they had therefore, withdrawn their application then.

IHQ representatives continued, “After requesting for a review, the results showed a stable performance in terms of annual earnings. External factors which had caused a temporary slump in the second quarter were inevitable and had undeniably affected the company’s performance.”

However, the consideration of the merger dropped, despite their fresh efforts to be listed again. When the first merger announcement was made in May, Cube Entertainment’s share was worth 8626 Won, instead of the revised 7976 Won per share.

The company reiterated that the less-than-satisfying performance during the second quarter was reflected on their accounts, despite showing strong performance in the first quarter. This had caused a lower revised value on the company’s worth.

The company opined that despite the drop of value, they are eager to push through the merger process, so to gain an upper hand to have better growth in the future soon.

As such, they have decided to merge with a SPAC (Special-Purpose Acquisition Company), which is known to be a ‘fast way’ to go through an IPO (Initial Public Offering).

“The competition in the entertainment industry is fierce. As such, development of existing artists and new rookies depends much on the outcome of the listing” and, “Through this listing efforts, we aim to recruit talents and to provide them with excellent and sufficient training equipment,” they emphasized.

About 15 billion Won of financing will be obtained if they achieved success in the process. With the funds, Cube Entertainments plans to recruit and debut rookies, and to enhance their overseas operations in China, Japan and South East Asia.

“The voluntarily withdrawal has indeed formed the largest question for investors and shareholders. Having said that, our earnings have stabilised. As much as our persistence, we have come to a decision that there is no reason to delay the listing efforts any longer.

Please take out with full credits

Trans: loveindacube.wordpress.com

Source: Hankyung

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