SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
REPORT OF FOREIGN PRIVATE ISSUER
PURSUANT TO RULE 13a-16 OR 15d-16 UNDER
THE SECURITIES EXCHANGE ACT OF 1934
For the month of May 2020
Commission File Number: 001-37821
(Translation of registrants name into English)
1-6 Shinjuku 4-chome
Shinjuku-ku, Tokyo 150-8510, Japan
(Address of principal executive office)
Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F.
Form 20-F X Form 40-F
Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1):
Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7):
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
|May 27, 2020|
|Name: In Joon Hwang|
|Title: Director and Chief Financial Officer|
May 27, 2020
Company: LINE Corporation
Representative: Takeshi Idezawa, CEO
Stock Code: 3938 (First section of the Tokyo Stock Exchange)
Notice Regarding Change in Specified Subsidiary
LINE Corporation (hereinafter the Company), resolved at the meeting of Board of Director held today to transfer shares in LINE Digital Frontier Corporation, a consolidated subsidiary (hereinafter LDF), to Webtoon Entertainment Inc. (hereafter Webtoon Ent). With this transaction, the Company expects to record income from the loss of control of LDF in the third quarter consolidated financial statement for the fiscal year ending December 2020.
LDF provides LINE Manga, a digital comic service in Japan market, while Naver Webtoon Corporation (hereafter Naver Webtoon) provides WEBTOON, a digital comic service in South Korea and US markets. Both companies have agreed to integrate LINE Manga and WEBTOON services to strengthen relationships with aim to further expand on a global scale. In order to accomplish this goal, it has been decided that Webtoon Ent, as Naver Webtoons controlling company, will hold 100% ownership of LDF shares. The Company will allocate the transfer price of LDF shares to acquire Webtoon Ent shares, where the ownership ratio is expected to be 33.4%.
Summary of Share Transfer
|(1)||Company Name||: LINE Digital Frontier Corporation|
|(2)||Transferee||: Webtoon Entertainment Inc.|
|(3)||Date of transfer||: Scheduled for early August 2020|
|(4)||Percentage of transfer||: 70%|
|(5)||Income from loss of control||: In process of assessment|
|The final amount to be recorded will be determined after the transfer of shares in early August 2020 and the third quarter consolidated financial statement for the fiscal year ending December 2020. The expected amount of impact in connection to the net income attributable to the parent companys shareholders is expected to be more than 30% of the average amount of the past five fiscal years.|
|(6)||Others||: Transfer price will not be disclosed due to confidentiality obligation with transferee.|
3. Overview of the Changing Specified Subsidiary (LINE Digital Frontier Corporation)
|(1) Company name||LINE Digital Frontier Corporation|
|(2) Location||4-1-6 Shinjuku, Shinjuku-ku, Tokyo|
|(3) Name and title of representative||Takeshi Idezawa|
|(4) Business||Digital Manga service leveraging telecommunications network and electronic technology|
|(5) Capital||JPY 100 M|
|(6) Date of establishment||July 2, 2018|
|(7) Principal shareholders and holding ratio|| |
LINE Corporation: 70%
Naver Webtoon Corporation: 30％
|(8) Relationship between LINE Corporation and LINE Digital Frontier Corporation||Capital relationship||The Company owns 70% of LINE Digital Frontier Corporation.|
|Personnel relationship||The Companys executives serve jointly as directors at LINE Digital Frontier Corporation.|
|Business relationship||There are business relationships, such as providing services, between the Company and LINE Digital Frontier Corporation.|
|(9) Earnings and financial position over the past 2 years|
Profit from ordinary activities(Thousand Yen)
Profit for the year(Thousand Yen)
Basic earnings/ per share(Yen)
Total assets (Thousand Yen)
Net assets(Thousand Yen)
Net assets per share(Yen)
1. Net income per share is calculated based on the average number of issued shares during the relevant period.
2. Net assets per share is calculated based on the total number of issued shares at the end of the period.
3. As LDF was established on July 2, 2018, consolidated operating results and consolidated financial positions for the most recent two periods are stated herein.
(Reference) Consolidated Earnings and Consolidated Financial Position Over the Past Recent Two Years
Profit from operating activities (Thousand Yen)
Net income (Thousand Yen)
Net income per share (Yen)
Total assets(Thousand Yen)
Net assets (Thousand Yen)
Net assets per share (Yen)
LDF is an unlisted company and does not prepare a consolidated financial statement. The above consolidated earnings and consolidated financial positions represents a simple aggregation of this one subsidiary of the Company.
Summary of Webtoon Entertainment Inc.
|(1) Company name||Webtoon Entertainment Inc.|
|(2) Location||5750 Wilshire Blvd. Ste 640, LA, CA 90036|
|(3) Name and title of representative||CEO JUN KOO KIM|
|(4) Business||Internet Entertainment Service|
|(5) Capital||315,514.64 USD|
|(6) Date of establishment||September 9, 2016|
Impact on Business
LDF will change from a consolidated subsidiary to an equity-method affiliate of the Company with this transaction. The Company expects to record income from the loss of control of LDF in and the third quarter consolidated financial statement for the fiscal year ending December 2020. The impact of this transaction on the Companys results will be promptly disclosed upon the completion of assessing the amount of impact.