South Korea’s largest grocery and discount chain operator E-Mart Inc. will fuel an additional 270.6 billion won ($242.7 million) in its sibling company Shinsegae Chosun Hotel through new share purchase to enable the cash-strapped hotel unit to ride out the protracted Covid-19 crisis.
With the purchase of 18,513,619 shares, E-Mart’s stake in Shinsegae Chosun Hotel will increase to 99.96 percent, the company announced Thursday in a regulatory filing. It will take up the new shares on Dec. 4 - about 180 billion won in cash and the rest in non-cash assets.
This is E-Mart’s second capital injection in the hotel operator so far this year. It purchased 100 billion won worth new shares of the hotel unit in April. The capital injection is to provide the virus-hit hotel unit with working capitals for improvement of financial structure, E-Mart said.
Shinsegae Chosun Hotel has extended its loss streak this year due to a plunge in booking rate from Covid-19 outbreaks. It delivered an operating loss of 14.8 billion won in the first quarter, 18.0 billion won in the second quarter, and 14.6 billion won in the third quarter.
E-Mart shares fell 1.58 percent to close Friday at 155,500 won in Seoul.
By Lee Ha-yeon
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