Youngone Corp, the South Korean apparel manufacturer behind global outdoor brands like The North Face and Patagonia, has announced a significant financial boost to its Switzerland-based subsidiary, Scott Corp. The company will lend 150 million Swiss francs ($176.8 million) at a 4.6% interest rate, as confirmed in their recent regulatory filings. The loan, set to mature on December 27, 2024, includes an initial transaction of 100 million francs completed earlier this week, with the remaining 50 million francs to be provided later in the year.
Scott Corp, in which Youngone holds a majority stake of over 50%, is a retailer specializing in bicycles, winter sports equipment, motorsports gear, and sportswear, with operations spanning across Europe, the US, South Africa, and India. The infusion of funds is intended to support Scott’s business operations, with a financial controller appointed by Youngone to supervise the fund’s utilization.
This financial move follows a year of profitability for Scott, which reported a 26.4% increase in net profit, reaching 60.5 billion won ($46.3 million) last year. The decision to lend comes amidst an ongoing legal conflict between Youngone and Scott’s founder, Beat Zaugg, who is also the second-largest shareholder. The dispute, which led to an arbitration request by Youngone at the International Chamber of Commerce (ICC) in September 2022, revolves around a shareholders’ agreement made in January 2015 and allegations of a material breach of contract by Zaugg. Youngone is currently seeking ICC’s confirmation for exercising a call option on Scott shares held by Zaugg.
This strategic financial support by Youngone indicates its commitment to Scott’s growth and stability, despite the backdrop of legal complexities.
