Viva Republica, operator of mobile financial service Toss, said Thursday that it has converted all of its redeemable convertible preferred shares to convertible preferred shares, in a move to enhance capital stability.
Redeemable shares, or RCPS, refer to preferred stocks that the issuing company may trade for cash, while convertible shares, or CPS, allow the shareholder to exchange for common stocks. The latter is recognized as capital under both Korean Generally Accepted Accounting Standards (K-GAAP) and International Financial Reporting Standards.
Since its establishment in 2013, Viva Republica has raised some 300 billion won ($256 million) in capital, mostly by issuing RCPS.
“This is one of the typical capital supply methods for startups, but gearing up for the internet-only bank and brokerage business, Viva Republica has decided to further strengthen shareholders’ capital stability,” the company said in a release.
Last month, a consortium led by the Toss operator applied for a business license to establish a new internet-only bank, rising as a plausible winner.
The stock conversion was adopted upon the unanimous consent of the company’s shareholders -- including Altos Ventures, Good Water Capital, PayPal, Kleiner Perkins and Sequoia China.
“Our shareholders have expressed their full-fledged support for Toss’ vision and business. The latest conversion decision for all investors to give up their redeemable rights was based on deep mutual trust,” said CEO Lee Seung-gun.
“I hope that with this latest move, Toss may now wrap up the capital stability issues and focus entirely on financial innovation."
By Bae Hyun-jung (email@example.com