CJ Foodville Co., a food service unit under South Korean conglomerate CJ Group, will spin off its coffee shop chain to shore up corporate finances following losses from overseas operations.

The Korean company said on Wednesday it plans to demerge A Twosome Place by next February and own a full stake in the café.

A Twosome Place has about 910 stores in Korea and China. It is the third largest coffee chain brand in Korea by store number, after Starbucks Coffee Korea and another local chain Ediya Coffee.

The move is expected to spur the growth of the coffee operator as an independent company. All of A Twosome Place`s chain and franchise operations, as well as all staff working for the related businesses will move under the stand-alone business.

Despite running a profitable business, A Twosome Place has failed to receive adequate investment because of its money-losing parent company, according to observers.

CJ Foodville posted an operating loss of 4.1 billion won ($3.77 million) in 2015 and 2.3 billion won last year, largely due to its lackluster performance overseas. The company is said to be mulling the public listing of the spin-off coffee chain to raise more funds through the equity market.

A CJ Foodville official said an initial public offering was under review but that they would first have to finalize the demerger before taking any action.

By Chung Woo-sung and Kim Hyo-jin

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