[Issue Check] Timef ARS is virtually ‘impossible’… There is only one alternative

Why did Timef go through ARS (autonomous restructuring)?

The court made a decision on the 2nd to approve the ARS (Autonomous Restructuring Program) applied for by TimePrice (Timon, WeMakePrice). Approximately 1 to 3 months was granted to autonomously negotiate with creditors and carry out restructuring. In fact, in a situation where the Q10 Group has been disintegrated, there is no clear plan for survival other than attracting external investors and raising funds.

■ARS is virtually impossible… Buy time to go to P Plan

Usually, when a company experiences a temporary liquidity crisis or its debt reaches an unsustainable level, it seeks to survive by applying to the court for rehabilitation. It usually takes about a month from when you apply for rehabilitation to the process starting.ARS is a system that allows you to utilize this time interval.no see.During this period, the company and creditors are given the opportunity to autonomously negotiate restructuring.That's right.

The table below is a flow chart of the ARS rehabilitation procedure. If a company declares its intention to use ARS during the rehabilitation application stage, the court makes a decision to approve ARS. From this point on, the consent of the creditor must be obtained. Companies must prepare a preliminary plan containing debt repayment plans and obtain the consent of creditors.Unanimity is the ruleno see. If consent is unanimous, as in case ①, the rehabilitation application is canceled and restructuring proceeds according to the preliminary plan.

How many cases are there in which ARS is successful after unanimous approval from creditors? Since this system was introduced in 2018, only 22 cases have applied for ARS. A total of 10 of these places are considered success stories of ARS.Summarizing the characteristics of these companies, there are 'less than 10 creditors' or 'a small number of creditors hold most of the bonds'.It is presumed that ARS was successful by persuading a small number of creditors.

In contrast, Timev's combined creditors are estimated at approximately 110,000. It is virtually impossible to obtain unanimous consent from these creditors. If some creditors oppose the preliminary plan, ARS will be suspended and rehabilitation procedures will begin again.

Resuming rehabilitation procedures does not mean going through the normal course of rehabilitation procedures again. If creditors holding more than one-half of the bond amount agree to the preliminary plan prepared during the ARS period, the court grants permission to proceed with rehabilitation procedures according to the preliminary plan.This is called the P plan. In case ② of this step in the table above,no see.

In reality, Timon and WeMakePrice appear to be considering case ②. This is because it is virtually impossible to obtain the consent of all 110,000 creditors.In-ho Jeong, a lawyer specializing in corporate rehabilitation (Daeryun Law Firm), said, “If you move to the P Plan, the pre-plan prepared during the ARS process becomes the rehabilitation plan, so you can proceed with the rehabilitation process quickly.” He added, “I think Timeef knew that unanimous agreement was impossible, and probably took the P Plan into consideration and applied for ARS.” He added, “The ARS period is about 1 to 3 months, so it appears that this is a measure to buy time.”

■The reason why Timon and WeMakePrice have no choice but to take their own lives

Each affiliate has a different survival strategy to resolve this sales non-settlement situation.Koo Young-bae, CEO of Q10 Group, said in an interview with a media outlet on the 1st, “We will launch K-Commerce by merging Timon and WeMakePrice.” We are considering converting bonds exceeding KRW 1 billion into investments so that the seller can become a shareholder.no see. And after merging the two companies, the goal was to list the merged company between 2025 and 2026.

However, it is said that there is considerable internal opposition to Representative Koo's plan. There are also stories that shouting was exchanged between some executives during a Zoom video conference held over the weekend. In particular, one executive said, “The focus should be on how to settle the unsettled sales proceeds, but can converting them into stocks be the fundamental compensation?”

As the executive said, the key now is what to do with unsettled sales proceeds. If an equity-to-equity conversion is made, the unsettled proceeds (bonds) are converted into stocks, so money is effectively tied up. Sellers who are desperate for cash have no choice but to protest. CEO Koo's goal is to list the company between 2025 and 2026, but the possibility is significantly low.

Timon CEO Ryu Gwang-jin clearly voiced his opposition to CEO Koo’s K-commerce plan. Representative Ryu said, "Expressing his intention to take his own path, such as “We must seek independent survival as the CEO of Timon,” “We are communicating and making efforts with M&A and investment attraction in mind,” and “It is difficult for Timon and WeMakePrice to get approval for a merger, and the possibility of realizing it is low.”I have done it.

In particular, in the case of Timon, it is understood that it was considering its own route even before this incident.This happens. According to the industry, TimonA few days before the non-settlement of sales price occurred, I visited e-commerce company A and expressed my intention to acquire it.It is said that he asked.

An e-commerce official said, "Two days before the non-settlement of sales payments occurred, Timon asked about its intention to acquire the company," and added, "It seems that they had anticipated this situation and had been exploring their intention to acquire it."

WeMakePrice, which has so far expressed its intention to “cooperate within K-commerce under the premise that it will help victims recover,” is also understood to have recently changed its position.CEO Ryu Hwa-hyun said in a phone call with Money Today Broadcasting, "I feel like there is no control tower," and "For K-commerce to succeed, a lot of preparation is needed, but it is currently insufficient."He said.“After ARS approval, we have received acquisition offers from several investors and are considering selling to a third party.”It was stated.

The fact that Timon and WeMakePrice took their own paths is closely related to this ARS. At the time, the rehabilitation court said,The first step is to reduce the number of creditors.It is said that an order was given.Reducing the number of creditors means ‘solving as much as possible the problem of non-settlement of sales proceeds during the ARS period.’It is also.

It is a self-evident fact that Timon and WeMakePrice have no money.To solve this situation, we have no choice but to raise funds from outside.That's right. This is also the reason why Timon and WeMakePrice have no choice but to take their own independent route.

WeMakePrice currently estimates the unsettled sales amount to be 350 to 400 billion won and the number of unsettled sellers to be 60,000.no see. Of these, it is estimated that there are about 50,000 sellers selling less than 1 million won. Therefore, the position is that if new funds of approximately 50 billion won (1 million won x 50,000) come in, urgent fires can be put out immediately.

CEO Ryu said, “If 50 billion won comes in, 70-80% of the sellers expected to suffer damage in July and August can be repaid, and if 100 billion won, about 95% can be repaid.”

If CEO Ryu's plan is implemented, the number of creditors is expected to decrease significantly. It is presumed that the reason Timon is looking for external investors is the same as WeMakePrice. The method is to raise new funds, settle the sales proceeds of small sellers, and then repay them over a long period of time through negotiations with top sellers.

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