Kakao Games halts IPO plan

By Jun Ji-hye

Kakao Games canceled a procedure to get the company listed on the nation's secondary Kosdaq market this year, citing a change of its priorities in dealing with several tasks, Tuesday.

Kakao Games CEO Namkoong Whon

The company said the decision was made from the long-term point of view focusing on its continuous growth, noting that it decided to prioritize other core tasks this year, including the development of new games.

The game subsidiary of the nation's top messenger app operator Kakao plans to push again for procedures for an initial public offering (IPO) on the Kosdaq next year after realigning the company.

“We have decided to focus on core issues for this year's business strategy as well as developing new games and pushing for mergers and acquisitions (M&A) of firms possessing intellectual properties,” said an official from Kakao Games. “Following the decision, the IPO, which has been one of our priorities, will be pushed to next year again.”

The cancellation comes amid a delay of supervision by the Korean Institute of Certified Public Accountants (KICPA), a procedure necessary for the IPO.

The supervision is being delayed as Kakao Games has yet to clarify standards to evaluate stock values of game developers it possesses. The KICPA has demanded Kakao Games submit related materials to clarify the issue.

Kakao Games has made investments in five game developers including Silver Star Games, having secured stakes of 20 percent to 40 percent of those companies.

Kakao Games said, though it canceled preparation for going public on the Kosdaq, it will continue to make efforts to complete the supervision procedure to secure financial transparency to raise the trust of investors before pushing for the IPO again.

Kakao Games CEO Namkoong Whon said the company will enhance the parent-subsidiary structure, noting, “The value of Kakao Games will be further strengthened when we go public afterword.”