E-Land Group’s funding plans of 1 trillion won (US$942 million) have failed to meet the year-end deadline, after key investor Meritz Securities decided not to join the scheme at the last minute, according to industry sources on Jan. 5.
E-Land World, the retail giant’s de facto holding unit, had sought to secure 1 trillion won from multiple investors as part of efforts to improve overall financial stability.
The firm planned to secure 800 billion won by selling 20 to 30 percent convertible preferred stakes to a consortium led by Korea’s Keystone Private Equity and attract 200 billion won from Hong Kong-based Anchor Equity Partners.
But Keystone withdrew the plans after Meritz, which had planned to invest 300 billion won, gave up on the deal.
“Mertiz knew that we were in a hurry to meet the year-end deadline and asked for unreasonable demands we cannot accept,” an E-Land official told The Investor on condition of anonymity without further elaborating.
Sources predict Meritz may have asked for a higher yield rate and more control over the company, but E-Land declined the terms. NH Investment and Securities has also reportedly scrapped plans to invest up to 300 billion won into the consortium for similar reasons.
Now Anchor Equity Partners is the sole remaining investor for the 1 trillion won funding scheme. The firm said on Jan. 4 it would invest 200 billion won into E-Land as planned.
E-Land on Jan. 5 denied that the scheme has failed, saying it will secure the remaining amount in the first half of this year.
Additional funding is crucial for E-Land to pay back debts, including short-term debt of 300 billion won due in March. The group is making all-out efforts to improve its financial stability before turning into a holding firm management structure.
The group has also been selling off lucrative assets in recent days. In August last year, it sold its home furnishings business Modern House to MBK Partners, the nation’s largest private equity firm, for 700 billion won.
By Song Seung-hyun (email@example.com