E-Land Retail to buy back stock on IPO miss

E-Land Retail will buy back 400 billion won ($359 million) worth of its shares from financial investors as it is unable to complete a planned initial public offering (IPO) by June, the company announced Friday.

The cash-strapped retailer undertook a pre-IPO stock sale in 2017, raising 400 billion won from a consortium of six investors including Dongbu Securities. Under the terms of the offering, it had to go public within two years, which would be on or before June 19.

The decision to buy back the shares was made after E-Land Retail concluded it will be difficult to go public by the promised date. Following the purchase of its shares, E-Land Retail will have no financial investors.

“Uncertainties about the plan to go public are developing following recent volatility in the stock market,” said an E-Land Group spokesperson. “Under the agreement with investors, we decided to buy our shares before the planned IPO scheduled for this year.”

The decision was made after E-Land concluded that rushing to IPO won’t help the company improve its financial situation.

The current attempt to go public is its second.

E-Land Retail planned a public offering in 2017, but it was forced to delay the listing after its E-Land Park food and dining subsidiary was embroiled in a controversy over not giving full payment to workers.

To improve its financial condition, E-Land Group sold its casual clothing brand Teenie Weenie to China’s V-Grass Fashion and its real estate.

While admitting possible difficulties completing an IPO, the company stressed it will continue restructuring.

E-Land Retail’s debt ratio last year was estimated at 172 percent, despite its operating profit rising 32 percent on year. The group plans to lower the ratio to below 150 percent.

BY JIN MIN-JI [jin.minji@joongang.co.kr]