E-Land Group seeks to sell its cruise business

2017.08.09 09:56:15 | 2017.08.09 09:57:06

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South Korea’s fashion and retail conglomerate E-Land Group that is looking for new owners for its hotel and resort businesses is also said to be seeking to dispose its cruise operations unit in a move to concentrate on retail and fashion businesses.

According to multiple sources from the investment bank industry on Tuesday, E-Land Group has recently selected EY Han Young as the financial adviser to initiate the sell-off process of E-Land Cruise Co., a unit that provides cruise and inland water transportation services on the Han River in the country’s capital city Seoul. E-Land Group is reportedly planning to officially put its cruise unit up for sale after it successfully picks candidates for two Kensington hotels each on Jeju Island and in Pyeongchang, Gangwon Province, as well as Bears Town Resort in Gyeonggi, according to sources.

E-Land Cruise, the sole operator of cruise services on the Han River, has been grappling with consecutive losses for several quarters. Last year, the company reported a 2.8 billion won ($2.5 million) operating loss and sales of 12.7 billion won, and there is no sign of any immediate recovery in its business this year amid the ongoing diplomatic row between Seoul and Beijing over Korea’s deployment of United States’ Terminal High Altitude Area Defense (THAAD) anti-missile system. China’s travel ban on group tours of its people to Korea in retaliation against the THAAD decision added woes to the company that had already fallen into a state of capital impairment as of end of last year.

Kensington hotel in Jeju [Photo by E-Land Group]이미지 확대

Kensington hotel in Jeju [Photo by E-Land Group]

Despite the company’s poor financial health, its sale is expected to draw attention from investors because the company is the only operator of cruise ships on the Han River.

An unnamed official from the investment bank industry anticipated that once its sale process kicks off, many investors would show interest in the auction. In particular, more synergy effect would be created if a strategic investor from the cultural industry acquires the company, the official added.

Industry experts expect the company to issue new shares to a new owner, considering that the company’s capital is completely eroded with debts that outweigh its assets.

Once E-Land Group completes the disposal of its leisure and tourism businesses, it is expected to focus on fashion and retail businesses, industry observers anticipated.

Another unnamed official from the investment bank industry said that E-Land Group will likely sell additional assets to readjust its portfolio. The group has already sold off Teenie Weenie and Modern House brands and significantly improved its financial standing.

E-Land Group has recently sent investment letters to invite potential buyers to bid for its three assets - Kensington hotels in Jeju and Pyeongc hang, as well as Bears Town Resort. The conglomerate plans to receive preliminary bids from contenders in the end of August. It plans to allow investors to buy the three assets separately to speed up the sale process.

By Chun Gyung-woon

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