이 기사는 2021년 07월 06일 07:58 thebell 에 표출된 기사입니다.

Concerns are growing over Emart’s credit profile as the hypermarket operator’s 3.44 trillion won ($3 billion) acquisition of eBay Korea is likely to weigh on its financial health.

Global credit rating agency S&P placed Emart on its negative credit-watch list on June 29. The decision came after the supermarket chain, part of Shinsegae Group, announced on June 24 that it agreed to acquire 80% of eBay Inc’s South Korean operations for 3.44 trillion won.

The deal size is significantly larger than Emart’s cash and cash equivalents of 856.6 billion won at the end of March on a non-consolidated basis, and even compared with a little over 1 trillion won in cash, cash equivalents and short-term investments.

Emart generated annual earnings before interest, taxes, depreciation and amortization (EBITDA) of about 800 billion won on average in recent years on a non-consolidated basis, suggesting the sum of its available capital resources and EBITDA still falls far short of the acquisition cost. This was a reason that S&P expected Emart’s debt leverage to increase substantially in the future.

Korea Ratings, a domestic credit ratings agency, also expected Emart’s interest bearing debt to assets ratio and net debt to EBITDA ratio to stay at about 40% and six times, respectively, in the mid-term versus the 27.7% and 3.6 times at the end of 2020.

The estimates are above the thresholds set by the ratings agency for rating action. Korea Ratings said it could consider lowering the ratings on Emart from the current AA0 if the company’s interest bearing debt to assets ratio and net debt to EBITDA ratio stay above 30% and 6.5 times.

However, credit analysts largely expect no impact on Emart’s credit rating, remaining optimistic about potential synergies between the supermarket chain and eBay Korea’s open market platforms.

“Given the rapid pace of ecommerce growth, making a quantum jump through an acquisition appears to be a more suitable strategy than pursuing organic growth opportunities,” said an industry insider.

“(Emart’s) financial position will deteriorate in the short-term, but in the mid to-long term, the planned acquisition will help enhance its business competitiveness as the shift to online accelerates.”

The takeover of eBay Korea, which operates open market platforms Gmarket and Auction, is expected to enable Shinsegae Group to become the second largest players in the country’s ecommerce market only after Naver. Last year eBay Korea and SSG.com, Shinsegae’s ecommerce platform, had a transaction volume of 20 trillion won and 4 trillion won, respectively. (Reporting by Hye-rim Pi)