The retail arm of E-Land Group said it has agreed to sell a majority stake to a consortium as part of its efforts to reduce financial burdens and restructure the company ahead of its planned public listing early next year.

According to the company on Tuesday, E-Land Retail is set to sell 69 percent of its shares for 600 billion won ($531 million) to a consortium including Curious Partners. Dongbu Securities is managing the deal.

“The deal is not complete yet, but we expect it to be closed before the end of June,” a spokesman for E-Land Group said.

The deal will inject much-needed cash into the group, which must pay out about 300 billion won for its redeemable convertible bonds next month. The group suffered a cash problem when its planned listing of E-Land Retail was pushed back to the first half of 2018 following public outcry over E-Land restaurants’ treatment of its part-time employees.

Last month, the group announced through a press briefing that it would sell its E-Land Retail shares to acquire funds needed to pay back the company’s obligations, while pursuing a restructuring of the group.

Currently, E-Land Group is a vertically structured company, with holding company E-Land World controlling E-Land Retail, which in turn controls E-Land Park. E-Land World runs the company’s fashion business, E-Land Retail runs retail distribution channels and E-Land Park operates leisure and restaurant businesses.

After restructuring, E-Land World will become a holding company for three horizontal entities including E-Land Retail, E-Land Fashion and E-Land Park. This new structure will allow E-Land World to operate as an investment holding company without any business operations of its own, by separating E-Land’s fashion division into a subsidiary.

E-Land is also currently in talks with private equity firm MBK Partners to sell its restaurants including Nature Kitchen and Ashley, currently operated by E-Land Park, as well as its lifestyle shop Modern House. Earlier last year, E-Land sold the rights to its youth fashion brand Teenie Weenie to Chinese fashion company V-Grass. 

By Won Ho-jung (hjwon@herladcorp.com)