E-Land reveals new plan to neutralize debt

Indebted retailer E-Land Group revealed a revised turnaround strategy focused on initial public offerings (IPO) of its businesses amid a disappointing response from investors to an earlier plan.

The scheme, announced on Wednesday, is also part of the cash-strapped retailer’s long-term efforts to change its organizational structure so that E-Land World will serve as its de facto holding company.

E-Land initially planned to raise 1 trillion won ($895 million) from investors this year, but lowered its target to 400 billion won. To offset the lack of investment, the group is relying on the market debuts of its businesses, including its fashion unit E-Land World and E-Land Retail.

“We will seek to stabilize our capital streams by taking E-Land Retail public by the first half of next year and later through the initial public offering of the fashion business of E-Land World,” said Lee Yun-ju, E-Land Group’s chief financial officer.

The group said that the IPO of E-Land World’s fashion division could take place as early as the first half of this year.

A pre-initial public offering refers to a scheme that allocates a portion of an initial public offering to private investors right before the IPO.

The group has planned to take E-Land Retail public for years, but the move has been delayed numerous times. E-Land said that it is resuming its efforts to list the company by the first half of next year.

It will apply for a preliminary screening of E-Land Retail’s IPO this year, according to a statement from the group. E-Land operates around 50 major shopping facilities nationwide, including Dong-A Department Store, NC Department Store and NewCore Outlet.

Its debt-cutting measures came as the debt ratio of its de facto holding company E-Land World soared.

E-Land’s debt stood at 399 percent in 2013 and 303 percent in 2015. It later fell to 198 percent after selling off assets, such as its brand Teenie Weenie. E-Land expects the ratio will fall further to 168 percent in the first half of this year.

The group attempted to attract 1 trillion worth of investment last year through a fund led by Keystone Private Equity, but failed to get enough investors to meet its goal.

In addition to improving its balance sheet, the group also vowed to focus on lucrative business segments, such as the fast fashion apparel market in Southeast Asia.

BY PARK EUN-JEE [park.eunjee@joongang.co.kr]