Sale of JEIO to ISU Petasys

The largest shareholder of JEIO Co., Ltd. (the “Target”), and ISU Petasys Co., Ltd. (the “Purchaser” or the “Acquirer”), entered into (i) a stock purchase agreement under which the Seller will sell to the Purchaser approximately 14.60% of the issued shares of the Target held by the Seller. Additionally, the Target and the Acquirer entered into (ii) a share subscription agreement pursuant to which the Target will issue to the Acquirer new shares representing approximately 13.86% of its issued shares, and (iii) a convertible bond subscription agreement under which the Target will issue to the Acquirer KRW 42 billion worth of ‘Series 2 Bearer Interest Unsecured Private Placement Convertible Bonds’, which can be converted into shares representing approximately 5.48% equity interest in the future. (The aforementioned percentages are calculated on the assumption that the new shares are issued and the convertible bonds are converted into shares.)

This transaction involves a structure whereby a listed company becomes the largest shareholder of another listed company. Simultaneous negotiations were conducted on multiple fronts, including the sale of existing shares, the issuance of new shares, and the issuance of convertible bonds. Due to the nature of a transaction between listed companies, intensive negotiations within a short period were required to maintain strict confidentiality, rendering the deal highly complex and challenging. Furthermore, this transaction was a landmark case where the largest shareholder was granted an exemption under the Korea Exchange (the “KRX”) rules to pursue an M&A transaction during the post-listing protection period, which is unprecedented in the past decade, and therefore, strategic planning and consultation with the KRX was critical.

Lee & Ko provided comprehensive and dedicated legal counsel throughout the entirety of this approximately KRW 300 billion transaction, including advising on the review of the transaction structure, drafting various agreements, negotiations, and facilitating their execution, thereby ensuring the successful execution of the series of agreements related to this transaction. Through such professional and effective counsel, the legal issues arising from the complex transaction structure and the unique characteristics of listed companies were successfully resolved, enabling the transaction agreements to be smoothly executed.