Wemade’s 920 billion won sell-off pushed back to December

Postponement raises questions over regulatory approvals in China and consortium’s funding for acquisition

The planned 920 billion won ($688 million) takeover of Wemade has been delayed by two months after a consortium backed by Chinese game company Kingnet postponed payment of the remaining 828 billion won.

According to Wemade's regulatory filing on Wednesday, the scheduled closing date for the sale of shares held by Chairman Park Kwan-ho had been pushed back to December 30 from October 30.

Under the deal signed on June 30 this year, Park agreed to sell his entire stake in Wemade -- 13.35 million shares, or 39.33 percent of the company -- to Neopulse for 920 billion won.

Neopulse, which is the Chinese consortium's practical entity in Korea that currently holds a 0.92 percent stake in Wemade, paid a 92 billion won deposit, equivalent to 10 percent of the purchase price, when the agreement was signed.

The reason for the delay was not disclosed. Wemade only said that conditions precedent to the closing of the transaction had not been met within the originally scheduled timeframe.

The Korean game developer added that the transaction schedule may change depending on the progress of the transaction, noting that it will announce further disclosures if there are any changes.

Kingnet is participating in the takeover consortium, meaning the transaction is subject to relevant approval and reporting procedures involving Chinese authorities. Some industry watchers have questioned the consortium's financial legitimacy to fund the acquisition.

Kingnet previously reported in a September filing to the Chinese regulators that there was uncertainty over whether and when the investment would obtain the necessary permits, approvals and filings, saying that such an uncertainty could result in the transaction being delayed, modified or terminated.