South Korea’s Kolon Group plans to invest an additional 12.4 billion won ($9.1 million) in Papa Mobility Co., bringing its total investment in the ride-hailing service operator to 32.9 billion won.
According to industry sources on Friday, Kolon Corp., a fashion-to-construction-to-mobility conglomerate, will participate in a June 6 rights offering to raise 13.8 billion won in operating funds.
Founded in 2018, Papa Mobility is a ride-hailing service company for socially disadvantaged people, including the disabled, elderly, wounded and parents with babies.
The company offers door-to-door services like Papa Escort and Papa Air.
Kolon has already invested in Papa Mobility three times – 6 billion won via a third-party rights offering in May 2022 to acquire a controlling stake in the ride-hailing firm, 7.5 billion won in January 2023 and 7 billion won in November 2023.
Kolon Global engages in various businesses, including construction, trade, leisure and car imports Kolon Honorary Chairman Lee Woong-yeol, who stepped down from the group’s chairmanship in 2018, personally invested in Papa Mobility, raising his stake to as much as 33.5%.
His stake in Papa Mobility has decreased to 4.2% as he didn’t participate in previous rights offerings.
KOLON MOBILITY MAY EVENTUALLY TAKE OVER PAPA
Once Papa Mobility’s business takes off, industry officials said Kolon Mobility Group will likely acquire control of the ride-hailing service company through a stake purchase to create synergy with its automobile services.
As of the end of 2023, Papa Mobility posted 10.1 billion won in net losses with 10.4 billion won in assets.
Kolon Mobility, a spin-off of Kolon Global Kolon Global Corp., a Kolon Group affiliate with a presence in various business sectors, including construction, trade, leisure and foreign car imports, spun off its car import business, which was renamed Kolon Mobility Group as of Jan. 1, 2023.
Kolon Global, as a remaining entity, retains businesses such as Kolon E&C Inc., Kolon Sporex and a trading unit, while placing all automobile-related businesses, including Kolon Motors, an official dealer of BMW Group Korea, under Kolon Mobility.
Kolon Mobility also handles the imports of other foreign vehicles such as Audi, Volvo, Jeep and Rolls-Royce.
