Chinese Investment Boosts Market Listing for South Korea's Next Entertainment World
The Korean indie film distributor is set to go public on Dec. 23, having raised a public subscription deposit of $102.85M
South Korean distributor Next Entertainment World (N.E.W.) is slated to get a listing on the KOSDAQ board of Korea Exchange on Dec. 23, following high demand during its public subscription earlier this week.
According to Woori Investment & Securities, more than 13.9 million investors competed for the 414,293 placement shares on offer Monday and Tuesday (Dec. 15-16), raising approximately $102.85 million (113.288 billion won). The subscription/placement price has been fixed at about $14.78 (16,300 won) per share.
Observers say the $52.7 million investment in October by China's Huace Film & TV, which made the Chinese company the second largest stakeholder of N.E.W., has been integral to its successful subscription.
N.E.W. became the first independent investment/distribution firm in Korea to become a major player in the local industry, dominating 18.1 percent of the market here in 2013 with two of Korea's highest-grossing local titles The Attorney ($81.1 million) and Miracle in Room No. 7 ($89.5 million).
In September, however, the preliminary price range for the company was set much lower than expected at $11.51-14.78 (12,700-16,300 won) per share—particularly as some of N.E.W.'s biggest tiles of 2014, Obsessed and Sea Fog (a.k.a. Haemoo), did not perform as strongly in the box office, garnering 1.44 million admissions and 1.47 million admissions respectively.
In October, however, Huace bought out 15 percent stake in N.E.W. at a much higher price of $27.20 (30,000 won) per share. "The investment from China played a major role in downplaying the negative outlooks of N.E.W.," said a securities analyst.
"We weren't planning on going public when we first set up the company, but it is something we've had in mind for a while," said N.E.W. president Jang Kyungik. "The listing is happening much faster than expected, and we hope that going public will provide great momentum for innovation and new experiences."
Meanwhile, N.E.W.'s Sea Fog has been chosen as Korea's submission for the 2015 best foreign language Oscar category.