[THE INVESTOR] Cash-strapped E-Land Group said on May 21 it has decided to sell its home and living business brand Modern House to MBK Partners, the nation’s largest private equity firm, for 700 billion won (US$625 million).
Its restaurant business was also supposed to be sold but sources said the two parties failed to reach an agreement on the price.
“The Modern House deal alone will allow us to improve our financial structure. We will maintain our restaurant business for synergies with our fashion and retail businesses,” said an E-Land official said.
The latest deal comes after E-Land sold its young fashion brand Teenie Winnie to Shanghai-based V-Grass Fashion for 877 billion won in January this year.
E-Land said it would secure 1.58 trillion won cash from the two recent deals that would cut its debt-to-equity ratio that reached 300 percent in the fourth quarter last year to some 200 percent in the coming months.
The group added it would push ahead with E-Land Retail’s delayed IPO in the first half of next year. It had originally planned to list its food and dining subsidiary E-Land Park but the plans were ditched due to growing debt and labor disputes. Instead, the group is seeking to debut its retail subsidiary E-Land Retail on the local bourse.
“We will complete financial restructuring by the end of this year,” the official said. “We will continue efforts to modernize our corporate structure by listing E-Land Retail and setting up a holding company.”
By Park Ga-young (email@example.com)