E-Mart branch in Seoul. /News 1
E-Mart (139480), which is in crisis due to concerns about the insolvency of its real estate project financing (PF) of its subsidiary Shinsegae Construction, has started preliminary work to sell a portion of its related shares. A plan to sell a minority stake in Starbucks or spin off the ‘No Brand’ business unit to sell the stake is said to be likely.
According to the investment banking (IB) industry on the 29th, E-Mart has recently entrusted the general consultation authority related to the sale of its subsidiary shares to a domestic accounting firm and is said to be looking for a potential buyer.
The two most likely candidates for an internally negotiated part sale are Starbucks (SCK Company) and No Brand. In the case of SCK Company, E-Mart is the largest shareholder with a 67.5% share, and the second largest shareholder is ‘Apfin Investment Pte Ltd.’ (32.5%), a Singapore subsidiary of GIC. It is known that they are considering selling some of their shares in E-Mart.
Mathematically, it is possible for E-Mart to sell up to 33.74% of its shares in Starbucks. This is because E-Mart can maintain its position as the largest shareholder by holding 33.76%. However, this is not realistically possible, and it seems likely that E-Mart will maintain a majority by giving up less than 16.5% of the shares.
In the case of No Brand, it was reorganized into the ‘PL/Global Division’ in October last year by merging with another internal brand, ‘Peacock’. In order to sell a minority stake, the partition must first be turned off.
It is said that the biggest reason why E-Mart decided to liquidate its stake in affiliates was because of real estate PF risk. Shinsegae Construction is a subsidiary of E-Mart with a 42.7% share, and its contingent liabilities amounted to 250 billion won at the end of last year. It is known that the current industry estimate of the size of the insolvency is close to 400 billion won, and in the worst case, there is an analysis that it could expand to 1 trillion won.
For this reason, Shinsegae Construction decided to sell its entire leisure business division, including the golf course and the water field, to Chosun Hotels & Resorts for 180 billion won and raise 200 billion won through private placement bonds, but it was said that the group judged that this was not enough. An IB industry official said, “I understand that E-Mart has been considering taking out a loan using the shares of its affiliates as collateral for construction, or selling some of its shares altogether.”
However, E-Mart said, “Neither company is considering selling its shares.”
#단독 #EMart #starting #liquidate #affiliates #shares.. #Starbucks #Brand #mentioned #candidates
