Kakao VX has signed a stock purchase agreement to acquire a 45% stake in Gaseung Development from Seungsan, a company controlled by the founding family of South Korea’s GS Group. Once the transaction closes, Kakao VX will hold a 100% stake in Gaseung Development, positioning it to unilaterally determine the fate of the long-stalled Singal CC development project in Yongin, Gyeonggi Province.

According to investment banking sources on the 2nd, the agreement was signed recently, and upon closing, Kakao VX’s stake in Gaseung Development will rise from the current 55% to 100%. Gaseung Development was established in 2016 as a real estate development company, with the late Nexon founder Kim Jung-ju’s side and Seungsan—a GS Group-affiliated resort operator—each contributing 50% of the capital. Kakao VX acquired NXC’s entire stake in November 2020 and purchased an additional 5% from Seungsan in February 2021, becoming the largest shareholder.

Seungsan’s largest shareholder is Huh Yong-soo, vice chairman of GS Energy, who holds 62.60%, with the Huh family controlling most of the remaining shares: Huh In-young with 22.59%, Huh Seok-hong with 7.16%, and Huh Jung-hong with 5.26%. With this sale, the GS founding family will completely exit Gaseung Development.

The Singal CC project that Gaseung Development has been pursuing involves building an 18-hole public golf course on approximately 1.11 million square meters of land in Gongse-dong, Giheung-gu, Yongin. The original plan called for investing approximately 150 billion won (approximately $110.5 million) to build the golf course and establish an operating model integrating Kakao’s reservation and payment platforms with artificial intelligence and other IT technologies.

However, the project has been significantly delayed. Although completion was initially targeted for the end of 2022, prolonged negotiations with the Jeonju Choi clan—the landowner—pushed back the timeline, and land-related issues also disrupted project financing, leaving development stalled for an extended period.

Significance of Streamlining the Ownership Structure

The core significance of this transaction lies in simplifying the decision-making structure for the Singal CC project. Previously, with Kakao VX and Seungsan sharing ownership, coordination between co-shareholders was unavoidable during project execution. By securing the remaining stake, Kakao VX can now independently decide whether to proceed with the development, how to structure financing, and whether to modify the business structure.

The Singal CC project was a major variable during last year’s attempted sale of Kakao VX. At the time, Kakao VX had borrowed 60 billion won (approximately $44.2 million) from its parent company Kakao Games to invest in the golf course project, and the project delays and PF financing issues were reportedly cited as burdens by potential acquirers.

This year, Kakao VX’s largest shareholder changed to IVG, a subsidiary of Kakao Investment, and the company also entered into a long-term borrowing agreement of up to 100 billion won (approximately $73.7 million) with IVG. Given that development costs are included among the permitted uses of funds under the borrowing agreement, industry observers interpret this as keeping the possibility of reviving the Singal CC project open rather than abandoning it entirely.

Going forward, there are broadly two scenarios. If the land issues and other factors that have delayed the project are resolved, development could be restarted. Conversely, if the project’s viability is deemed insufficient, the company could restructure the business or utilize its assets to recover its investment.

An industry source said, “This transaction is significant in that it cleans up the co-shareholder structure and gives Kakao VX full decision-making authority over the Singal CC project. Given that there are already signs of development financing activity, the company will likely make a comprehensive assessment of land issues and profitability before deciding whether to proceed with the project.”