SEOUL, Aug. 14 (Korea Bizwire) — E-Mart Inc. has decided to buy back shares worth some 100 billion won (US$82 million) and securitize its assets through sale and leaseback arrangements.
“At the current stage, we have to save up our capability, and use that capability when there is an opportunity,” said Shinsegae Group Vice Chairman Chung Yong-jin at a management strategy meeting last June.
E-Mart’s decision to buy back its shares is a first since 2011 when the company spun off from retail giant Shinsegae Group.
Through the buy-back, the company is attempting to stabilize its plunging share prices and boost shareholder value.
The decision came immediately after the performance for the second quarter was revealed.
E-Mart reached reported an operating loss of 29.9 billion won for the first time since the company was established, largely due to growing competition from e-commerce giants over food businesses.
Shares of E-Mart, which used to hover above 300,000 won, dipped below 200,000 won this year. The shares are now priced around 110,000 won.
“The recent buy-back decision is based on our confidence in the company’s future potential,” said E-mart.
Chung also bought 140,000 shares of E-Mart last April, worth 24.1 billion won.
E-Mart also plans to securitize its assets through leaseback agreements, selling off buildings and leasing them back for operation.
Through this method, E-Mart expects to raise 1 trillion won, which will be used to stabilize its financial situation.
H. M. Kang (email@example.com)