Advisory on the acquisition of KRW 100 Billion Convertible Bonds by Musiccow, Inc.

Je Won Lee, Kyung Gyoon Park, Beum Rae Kim, Woo Young Choi, Hana Choi, Seonghwan Ju, Kyung Won Han, Chang U Jeong, Sua Jeong

Lee & Ko advised on the transaction of STIC MUSE Limited (“STIC MUSE”), an investment purpose company established through a PEF by STIC Investments, Inc. (“STIC”), in its investment in Musiccow, Inc. (the “Target Company” or “Musiccow”). The Target Company operates a music copyright (copyright fee participation claim) investment platform. The transaction was executed by an acquisition of convertible bonds with a face value of KRW 100 billion that was issued by Musiccow.
As the transaction involved a company that operates a platform that allows ordinary investors to invest in profits generated from copyrights, there were various legal issues associated with the transaction. In particular, a key legal issue centered on whether the right to participate in the proceeds from copyrights is considered securities under the Financial Investment Services and Capital Markets Act of Korea.
While advising STIC in several legal matters, Lee & Ko analyzed the potential risks associated with the purchase of the Target Company and proposed alternatives to cure them; moreover, the Target Company is currently improving its protection of the participants in its operation according to Lee & Ko’s advice.
Financial supervisory authorities are paying close attention to fractional investments, as fractional investing in various types of assets (including real properties) is gaining keen public interest. Thus, amid such public attention, this Transaction was an exemplary case that demonstrated the expertise of Lee & Ko’s private equity team, which successfully led to the investment in the leading player in the fractional investment platform.