Korea’s mid-tier business group E-Land Group’s negotiations to sell retail chain Kim’s Club to U.S. private equity giant KKR are still ongoing, the company’s spokesman said Monday.

Hwang Woo-il, spokesperson of E-Land Group, denied a Yonhap News Agency report that said the group’s chief Park Sung-soo at a boardroom meeting ordered company officials to thoroughly reconsider the sales of Kim’s Club and listing of its operator E-Land Retail.


“The news report is completely groundless. The deal is still ongoing and expected to be completed in the first half,” Hwang told The Korea Herald.

His comments came as talks over the sale of Kim’s Club were reportedly dragging on for a second month due to differences over price.

While E-Land Group wants about 700 billion won ($590 million) for the retail chain with its 37 outlets, its preferred bidder KKR is pushing to slash the price about in half, local news report said.

Some speculated the group might try to sell only part of Kim’s Club to the buyout firm and repurchase it later.

“It can take some time to reach an agreement over the price and a structure of the sale, which has not been decided yet,” Hwang said.

Selling off Kim’s Club is part of heavily indebted E-Land Group’s efforts to improve their balance sheet amid falling credit ratings.

The group recently announced another cash-raising plan to divest Teenie Weenie, a womenswear brand affiliated with E-Land International Fashion Shanghai Co., owned by the group’s Chinese arm. The brand’s annual sales reached 500 billion won last year.

The group aims to list E-Land Retail by 2017. It also seeks a pre-initial public offering for a merged company between two Chinese units E-Land International Fashion Shanghai and E-Land Fashion Shanghai in the second half of 2016.

A week earlier, credit appraiser NICE Investors Service cut credit ratings of group’s holding company E-Land World and E-Land Retail from BBB+ and BBB to BBB and BBB-, respectively, citing delayed efforts to reduce heavy debts.

The credit agency said E-Land would have to raise at least 1.6 trillion won cash to achieve meaningful improvement in its finances.

By Kim Yoon-mi (yoonmi@heraldcorp.com)