South Korean software solution provider TmaxSoft is seeking to raise 350 billion won ($288 million) from its last private funding round before an initial public offering (IPO).
TmaxData plans to issue exchangeable notes of 280 billion won and redeemable convertible preferred stock (RCPS) of 70 billion won in a private placement, sources said on June 1.
TmaxSoft’s existing investors include Lindeman Asia Investment, Timefolio Asset Management and a consortium of POSCO Capital and J&J Partners.
Lindeman Asia Investment invested 70 billion won two years ago by purchasing exchangeable notes issued by TmaxData and one million shares of TmaxSoft stock originally owned by its founder and chairman Park Dae-yeon. The remaining two investors reportedly later invested in TmaxData and TmaxA&C.
The capital invested by these three investors totaled 170.5 billion won. TmaxSoft had promised them the listing of TmaxSoft’s shares on the local bourse by this year to provide an exit opportunity. But this has become impossible because TmaxSoft only recently received an unqualified audit opinion for its 2018 financial statements, a qualifying condition to apply for an IPO with the Korea Exchange.
“It was only this April that TmaxSoft completed its 2018 audited financial statements,” said an industry insider. “Tmax is planning to use part of the proceeds from a funding round to return money to existing investors at a guaranteed yield instead of offering an exit opportunity through an IPO.”
A private equity consortium of J&J Partners and With Private Equity will be the only investor in a new funding round. The consortium is raising funds from domestic institutional investors for a 350 billion-won investment in TmaxSoft.
As the new capital is secured, TmaxSoft plans to speed up its preparation of the planned IPO. The remaining proceeds after returning money to existing investors will be used to develop database management systems and operating systems. (Reporting by Se-hun Jo)