A victim of payment delays from TMON and WeMakePrice participates in a demonstration calling for prompt refunds in front of the Korea Chamber of Commerce and Industry in central Seoul, Monday. Yonhap

All eyes are on whether cash-strapped TMON and WeMakePrice will be able to seek debt restructuring on their own after the Seoul Bankruptcy Court approved an autonomous restructuring support (ARS) program for the two e-commerce platforms on Friday.

ARS is a system in which the court supports smooth negotiations between debtors and creditors prior to the decision to commence corporate rehabilitation procedures and place troubled firms under court-led debt restructuring.

Since the program's introduction in 2018, several companies have actually utilized it to agree on restructuring plans and exit from rehabilitation proceedings.

On July 29, the two Korean affiliates of the Singapore-based e-commerce platform Qoo10 applied for corporate rehabilitation with the bankruptcy court, as their delayed payments to vendors have reached 274.5 billion won ($201 million), with concerns that the total amount could escalate to as much as 1 trillion won if future payments are included.

Through Friday's decision by the court, the two firms were granted up to three months to seek debt restructuring on their own, but there are numerous challenges that need to be addressed.

According to the court, the number of creditors is around 47,000 for TMON and 63,000 for WeMakePrice, totaling approximately 110,000. Currently, the bonds and assets of the two companies are frozen.

Skepticism is arising over whether the two firms will be able to agree with the large numbers of creditors to reschedule payments and secure the necessary funding during the given period.

"Fundamentally, the ARS program has a high likelihood of success when major creditors are financial institutions. However, for TMON and WeMakePrice, creditors are diverse, including sellers, general consumers and payment agencies," said Ahn Chang-hyun, an attorney at the law firm Daeyul that specializes in corporate rehabilitation.

"Even if financial bonds are restructured, it will be difficult to negotiate with the remaining creditors individually."

WeMakePrice CEO Ryu Hwa-hyeon arrives at the Seoul Bankruptcy Court to attend hearings over the firm's ongoing liquidity crunch, Friday. Yonhap

Qoo10's affiliates, for their part, are focusing on attracting new investments as securing liquidity is essential for debt repayments.

According to industrial sources, some companies and private equity funds have expressed interest in acquiring stakes in TMON and WeMakePrice after the court approved the ARS program.

However, due to the highly opaque financial structure of Qoo10 and the increasing scale of unsettled payments, there is uncertainty about whether the sales of its affiliates will be realized.

Against this backdrop, each affiliate is seeking its own path to survival, pursuing separate sales independent of the parent group.

One industry official said, "If the companies fail to demonstrate a unified effort to recover from the liquidity crisis and instead focus solely on individual survival, it will raise doubts about whether creditors and investors will have confidence in them."

If the two online marketplaces manage to reach an agreement with creditors during the ARS period, they will be able to exit from the court-led corporate rehabilitation procedures.

If negotiations fall through, the court will make the final decision on whether to commence rehabilitation proceedings.

If the court approves the commencement of these proceedings, a mandatory rehabilitation plan will be formulated and implemented. If rejected, the two companies will essentially enter bankruptcy.