LY Corp. subsidiary becomes largest shareholder of Kakao Games

A special purpose company backed by Japan's LY Corp. has become the largest shareholder of Kakao Games.

Kakao Games disclosed Thursday that LAAA Investment LLC has taken a 33.43% stake and become its largest shareholder, following the completion of a third-party allotment capital increase and a share purchase agreement.

LAAA Investment's largest shareholder is Petrico No. 6 Private Equity, whose primary investor is LY Corp., the operator of the LINE messaging platform.

LY Corp. participated through LAAA Investment in Kakao Games' 240 billion won (about $158 million) third-party allotment capital increase and a 60 billion won convertible bond issuance.

Kakao Games also disclosed Thursday that payment procedures for both the capital increase and the convertible bond issuance had been completed.

Kakao had previously held a 37.93% stake in Kakao Games as its largest shareholder, but its ownership fell to 14.68% after the acquisition process concluded.

A Kakao Games official said the company had secured roughly 300 billion won in large-scale funding and financial stability through the new investment. The official added that Kakao Games plans to step up strategic investment to strengthen its global competitiveness and build a foundation for mid- to long-term growth.

Kakao Games will hold an extraordinary shareholders meeting on Sunday to discuss appointing Kim Tae-hwan, chief strategy officer of Line Games, and Lee Si-woo, chief business officer of Kakao Games, as inside directors.

Kim and Lee have already been designated as co-CEOs pending their formal election as directors at the meeting.