April 16, 2024

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[THE INVESTOR] Kakao Chairman Kim Bum-soo recently pledged his shares as collateral for a 30 billion won (US$26 million) loan, the internet giant said in a regulatory filing on Nov. 21.

The Kakao chief secured the loan on a 7.6 percent stake, worth 73 billion won based on the stock price at 75,800 won, out of the total 18.5 percent he owned as of Nov. 14. The lending period is until May 15 next year. 

The lending, which the company said was secured for Kim’s private purpose, is the first of its kind since the merger of Kakao, then the operator of the mobile messenger KakaoTalk, and Daum Communication, the nation’s No. 2 search engine, in 2014. The merged entity Kakao made its stock debut the same year on the local bourse KOSDAQ.

Industry sources say the fresh loan could be used for Kakao’s “social impact” projects that aim to seek profits by solving social issues through creative ideas.

Kakao plans to set up a new entity, called KakaoMakers, early next year to oversee the projects. Sources say Kim is seeking to fund the projects out of his own pocket due to uncertainties of the nascent business.

As of the third quarter this year, Kakao has seen its operating profit surge 14.7 percent to 77.9 billion won. While its music streaming and mobile game services drove up profits overall, its flagship business using the KakaoTalk platform is suffering slowing sales recently.

By Lee Ji-yoon (jylee@heraldcorp.com)