[THE INVESTOR] Korean retail giant E-Land Group on July 4 said it has decided to cut its funding target of 1 trillion won (US$894 million) to 500 billion won, possibly due to lukewarm responses from potential investors.
“We failed to secure 1 trillion-won funding that was set to be achieved by the first half of this year,” E-Land CFO Lee Yoon-joo said in a press conference held in Seoul.
The group is offering a three-tranche deal depending on the level of risks and returns. It has secured 200 billion won and 300 billion won from private equity fund Anchor Equity Partners and Meritz Financial Group, respectively, as planned. Anchor chose the highest-risk tranche, while Meritz took the one with the second-highest risk.
But it could not attract an investor at the lowest-risk tranche worth about 500 billion won. Industry sources say investors could have felt the deal unattractive considering they were to make an already risky investment into the cash-strapped retail group.
“We will not divide tranches depending on the risks anymore. We now plan to start receiving funds from foreign investors,” Lee said.
The group added it is making all-out efforts to improve its financial stability before turning into a holding firm management structure. The group expected its debt ratio would drop to 168 percent in the first half of this year from 198 percent last year.
As part of efforts, the group has signed a partnership deal with Meritz to turn the deadline of its short-term loan worth 300 billion won into a long-term 400 billion-won loan. It also plans to sell other assets worth 400 billion won in the second half.
By Song Seung-hyun (firstname.lastname@example.org)