이 기사는 2019년 12월 12일 08:00 thebell 에 표출된 기사입니다.

South Korea’s retail conglomerate E-Land Group is at the final stage of its overhaul aiming at improving financial soundness.

E-Land World, E-Land Group’s fashion unit well known for its women’s apparel brand EnC, is currently negotiating with a private equity firm privately to sell the entirety of the company, sources familiar with the matter said last Friday. This planned sale is likely to be the final piece in efforts by the conglomerate to improve its financial footing.

E-Land Group has continued overhaul efforts for the last few years to reduce its debt ratio, which reached nearly 400 percent in 2016. With an aim to reduce it to 150 percent, the conglomerate started the series of asset sales. In 2017, it sold the casual clothing brand Teenie Weenie to China’s V-Grass Fashion for 870 billion won ($730 million) and shed its home and living business Modern House, selling it to private equity firm MBK Partners for 713 billion won ($597 million) in the same year.

E-Land Group has accelerated its efforts this year. In August, the conglomerate sold the footwear brand K-Swiss, which it had bought six years ago, to Chinese sportswear company Xtep International Holdings for more than 300 billion won ($260 million). The proceeds from this sale have been used to repay existing debt, lowering the conglomerate’s debt ratio to 160 percent.

E-Land Group also has split off the food service unit from its affiliate E-Land Park this summer to form a new company called E-Land Eats and received equity investment worth 100 billion won ($83.7 million) from SG Private Equity. This has allowed the newly formed company to start its operations with zero leverage.

Meanwhile, E-Land Group has recently decided to drop plans to issue pre-IPO shares of its Chinese clothing unit E-Land Wish, which has six kid’s clothing brands including Paw In Paw, one of the five most popular names in the Chinese kids clothing market. Initially, the conglomerate had intended to split off the Chinese subsidiary and issue fresh shares in a pre-IPO round to raise as much as 200 billion won ($167 million).

The scrapped deal reportedly drew interest from many industry players in China. But the series of successful asset sales in past years have resulted in considerable improvement of the conglomerate’s financial situation, decreasing the need to sell good assets.

With a new global accounting standard coming into effect in 2019, however, the conglomerate’s debt ratio is likely to rise slightly to 170 percent. In the future, E-Land Group is expected to continue to work on improving its financial profile, focusing on the profitability of existing businesses.

(By reporter Kim Hye-ran)