Krafton plans to raise RM20.6bil in record Korea IPO


You can play solo or form a squad with friends. — Photos: Krafton

SEOUL: Krafton Inc., the company behind hit mobile game PlayerUnknown’s Battlegrounds, filed to raise as much as 5.6 trillion won ($5 billion or RM20.60bil)) in a South Korean initial public offering that’s likely to be the country’s largest ever.

The gaming company will sell more than 10 million shares at 458, 000 won to 557, 000 won apiece, Pangyo-based Krafton said in a filing Wednesday.

The top of the range exceeded general market expectations and would grant Krafton a market capitalization of 28 trillion won, based on the number of common shares. Krafton plans to finalize the price July 9 and list on July 22.

Krafton is seeking to smash the record for the biggest debut among South Korean companies, previously held by Coupang Inc., which raised $4.6 billion in an IPO on the New York Stock Exchange in March.

The largest listing on domestic exchanges had been Samsung Life Insurance Co.’s $4.3 billion share sale in 2010. Riding a boom in retail trading, Asia’s fourth largest economy is on track for a record year of floats, with more deals from the likes of LG Energy Solution and Kakao’s affiliates likely to come in the second half.

Founded by Chang Byung-gyu in 2007, Krafton -- formerly known as Bluehole Inc. -- released the battle royale game PUBG in 2017. The title has sold more than 75 million copies across PC and console platforms and its mobile version has been downloaded more than a billion times, the company said.

It has catalyzed a genre that now also includes other global hits like Epic Games Inc.’s Fortnite and Sea Ltd.’s Free Fire. PUBG also accounts for the vast majority of Krafton’s sales and profits. The firm had revenue of 1.67 trillion won and operating income of 774 billion won last year, according to a regulatory filing.

Coding Prodigy Behind Hit Game PUBG Eyes IPO Worth Billions

The company hired Mirae Asset Daewoo as lead arranger while Credit Suisse Group AG, Citigroup Inc., JPMorgan Chase & Co. and NH Investment & Securities are co-arrangers.

Following the success of PUBG, Krafton is looking to expand into fields like artificial intelligence, deep learning and entertainment to expand its portfolio of growth drivers.

It’ll widen its games library with a new battle royale mobile title and a PC game that’s based on PUBG. It’s also planning to create an animated show and web cartoon that depict the game’s universe, Chief Executive Officer Kim Chang-han said in an interview published in January.

"Krafton has a lot of cash and is raising additional billions through the IPO, ” said Choi Jin-sung, analyst at Cape Investment & Securities. "There aren’t many great options in the market to buy a gaming developer. I expect it’s more likely for Krafton to pursue M&As in the entertainment industry.”

Krafton is expanding the reach of PUBG into new markets, including India. The corporation took over from Tencent Holdings Ltd. as publisher of the game in the South Asian nation, where it had notched up 175 million downloads before it was banned last year following heightened political tensions with China.

After the IPO, founder Chang will hold a 14% stake in Krafton, followed by Tencent with 13.2%, held through a subsidiary, the company’s filings show. - Bloomberg

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