South Korea’s financially-strapped fashion and retail conglomerate E-Land Group has placed part of its hotel and resort businesses up for sale in hopes to improve its balance sheet ahead of the plan to make its retail unit go public.

According to financial industry sources on Tuesday, E-Land Group and its sale advisor EY Han Young will hold a preliminary auction to sell two Kensington hotels - each on Jeju Island and in Pyeongchang, Gangwon Province - and Bears Town Resort in Gyeonggi Province on Friday. The offerings reportedly drew interest from about 20 investors in the private equity and real estate business. A deal could come through before October.

The group is also mulling to offload E-Land Cruise Co., a unit that provides cruise and inland water transportation services on the Han River in the country’s capital of Seoul.

The retail conglomerate that currently operates 24 hotels and resorts in Korea and elsewhere will sell additionally to raise funds and pay off debt.

The group has been proceeding with restructuring, having sold off Teenie Weenie and Modern House retail brands. Its holding company E-Land World’s debt ratio on a consolidated basis was brought down to 200 percent in mid-August from 253 percent at the end of June. Its aim is to lower the debt ratio to around 150 percent.

Its deleveraging endeavors come ahead of the initial public offering of E-Land Retail Co. vowed to be achieved by June 2019. E-Land World raised 600 billion won ($530 million) in April in a pre-IPO stake sale to a consortium led by private equity fund Curious Partners.

In addition, the group is seeking to demerge its fashion unit from unlisted E-Land World to turn the latter into a pure holding entity. This, in turn, is expected to simplify its governance structure and maximize each division’s operational efficiency, said market experts.

By Chun Gyung-woon and Park Yun-gu

[ⓒ Pulse by Maeil Business News Korea & mk.co.kr, All rights reserved]